October 22, 2025
Pharmacy benefit costs are one of the fastest-growing areas of health care spend. Yet many plan sponsors don’t realize one critical detail: the ability to conduct an annual market check is not automatically built into every PBM contract.
Without this provision, you lose one of the most effective tools for ensuring your pricing, guarantees and rebate terms remain competitive as the market evolves.
Market Checks Must be Clearly Stated in the Contract
Contract language like “annual review” may sound like it provides the transparency you need, but the fine print often tells a different story. Some PBMs exclude market checks altogether, while others impose restrictions, such as requiring mutual consent, limiting frequency or defining benchmarks in ways that render them meaningless in practice.
A proper market check clause guarantees your ability to compare your contract terms against current market conditions and to adjust guarantees accordingly. If your contract doesn’t include that flexibility, you could already be leaving money on the table.
Why a Market Check Matters
The pharmacy landscape changes faster than nearly any other area of employee benefits.
- Evolving drug pipelines: Specialty drugs and GLP-1 therapies are reshaping spend patterns.
- Shifting pricing benchmarks: Discounts and rebates that once looked competitive may now lag behind the market.
- PBM consolidation: Mergers and vertical integration continue to impact pricing transparency and flexibility.
A market check is a data-driven way to ensure your PBM contract remains aligned with these trends—without the disruption of a full RFP process.
Why Not Simply Issue an RFP?
When pharmacy benefit costs rise, an RFP might seem like the logical step. However, rebidding every year isn’t efficient or strategic.
- It demands significant time and resources from HR and finance teams.
- It can disrupt the member experience if transitions occur too frequently.
- It can strain relationships with existing vendors and partners.
A market check provides a more focused and efficient way to assess plan competitiveness, helping you to validate performance, uncover savings opportunities and maintain leverage, while preserving operational stability.
What’s in a Market Check
A comprehensive market check typically includes:
- Claims and rebate analysis: Comparing actual spend and guarantees with contract terms.
- Benchmark comparison: Aligning your PBM’s pricing with current market averages across multiple PBMs.
- Contract review: Assessing definitions, exclusions and terms that may limit realized savings.
- Scenario modeling: Projecting savings potential under updated market conditions.
This approach delivers a data-driven, strategic overview of your contract’s performance and identifies where renegotiation may be warranted to optimize value.
What an Independent Consultant Delivers
A pharmacy benefits consultant plays a critical role in ensuring a market check delivers meaningful results.
- Data validation: They collect and validate your claims data to ensure the analysis reflects actual performance.
- Benchmarking: They compare your plan against multiple PBMs, leveraging current, active contracts—not outdated surveys or generic models.
- Insights and recommendations: They interpret the findings and provide actionable recommendations.
- Negotiation support: When necessary, they support PBM negotiations to ensure that the agreed-upon adjustments are implemented accurately.
An independent, PBM-agnostic consultant provides objectivity and a breadth of current market insight that internal teams typically can’t access on their own.
The Benefits of a Market Check for Plan Sponsors
A well-executed market check provides substantial value to plan sponsors:
- Fiduciary protection: Demonstrates due diligence and active oversight of plan assets.
- Financial performance: Confirms that guarantees and rebates remain competitive in the current market.
- Operational stability: Maintains continuity without the disruption of a new RFP.
- Strategic insight: Reveals trends, new PBM entrants and evolving contract models.
In short, an annual market check keeps your PBM accountable, your pricing competitive and your fiduciary responsibilities covered—a smart, proactive practice in today’s ever-changing market.
Conclusion
Market checks are much more than an optional review; they are a critical fiduciary safeguard. With drug prices constantly changing , having the right to conduct an annual market check gives you the power to protect your plan, your members and your bottom line.
Ready to see how a market check can hold your PBM accountable and maximize the value of your contract? Contact us to learn more.
