5 Aspects of a Quality Pharmacy Benefits Procurement/RFP
Posted on July 17, 2025
Ensure Your Consultant and Procurement are Best-in-Class
Ten to fifteen years ago, pharmacy benefit manager (PBM) procurements were relatively simple: plan sponsors would go out to bid once or twice a decade to ensure they were getting the best rates from their PBM, or to find a new PBM offering significant discounts to win new business. Pricing was fairly straightforward, and the financials fit neatly on a spreadsheet. In 2025, the process and the stakes are exponentially more complicated: a labyrinth of pricing options (traditional, pass through, reference-based, cost plus, PMPM, etc.), potential contractual traps in definitions, terms and exclusions, a growing lineup of new vendors offering to fix transparency, over-utilization, GLP1 costs, specialty and biosimilar spend, and the fiduciary imperative codified in the CAA that is writ large in the ensuing class action lawsuits.
Against this backdrop, discerning employers are increasingly demanding more from their consultants and the procurement process. This blog will explore how, in a dynamic and ever-evolving industry rife with conflicts of interest, employers can better ensure that the procurement process aligns with their best interests and delivers best-in-class results.
1. Customized to Your Company, Priorities, Culture, and Benefits Strategy
PSG believes the fundamental orientation of a consultant supporting your procurement should be toward the plan sponsor’s goals, employees, and utilization. Legacy approaches to procurement may have focused on one or two pre-negotiated agreements which purports to offer the “best” pricing, terms, and conditions. However, in a pharmacy marketplace that is expanding in vendors, products, pricing modalities, lawsuits, costs, and cost categories, the best contract and terms for your company may not match the contract the consultant has in their files. The variables that change from employer-to-employer impact the company’s benefits strategy. For example, appetite for clinical disruption, data needs and capabilities, budget needs, hiring/retention concerns, workforce demographics and health. The optimal combination is a procurement that begins with learning your business and personnel needs, then utilizes your needs as the yardstick by which an objectively selected slate of vendors is measured.
Critical Question: Is your consultant focused on your plan, employees, and experience versus the templated solutions and contract language they are selling?
2. Due Diligence to Decide Which Vendors to Select (and Deselect) as Bidders
The pool of potential PBM bidders and models continues to grow, evidenced by the fact that two-sport legend Bo Jackson recently started a PBM. When recommending potential bidders conflicts of interest, such as coalitions or back-end commissions, can severely compromise the consultant’s objectivity. Independence involves discussing, or even interviewing, a healthy slate of PBMs, as well as examining programs and pricing models that might be a good fit to steward your company’s pharmacy benefit investment. In a well-run procurement bidding process, slots are valuable, so rather than just lining up the usual suspects, weighing the vendors and approaches most likely to be a good fit based not only on the consultant’s experience but also on a handful of structured conversations can be time well spent. Taking an extra step to thoughtfully select vendors may cost a week or two on the front end and incorporating a non-standard pricing model or PBM might complicate the evaluation. However, the impact of these decisions and subsequent mitigation of risks likely warrant the effort.
Critical Question: How much time and effort did you spend discussing, or even meeting with, potential bidders before selecting which PBMs would be invited to bid in your RFP?
3. Financial Evaluation That Accurately Measures Multiple Pricing Models and Contract Variations on a Level Playing Field
Each unique price point, contract exception, model change, formulary nuance, definition variance, credit, fee, or clinical program introduced in a PBM procurement creates variables that should be considered in the financial analysis. An independent analysis meticulously quantifies the impacts of these variations and, at best, accurately discloses them in the final analysis. Before a plan sponsor considers a new pricing model (e.g., NADAC, cost-plus, PMPM), it is essential to assess whether your consultant possesses the objectivity and expertise to properly account for each scenario and variable. All three1,2,3 of the fiduciary lawsuits have alleged that a national consultant steered a plan sponsor to a substandard PBM contact having been influenced by back-end reimbursement from a PBM. While two of the lawsuits have been dismissed, employers should be aware that there is a potential risk associated when the consultant has a financial incentive to recommend a particular PBM product. What is most important and incumbent on the plan fiduciary is to ensure the procurement process is objective and independent.
Critical Question: Does your consultant have the objectivity and expertise to account for new pricing models, complicated contract variability, and vendor nuances?
4. Evaluating Beyond the Spreadsheet
For an experienced and independent consultant, the expertise to perform the spreadsheet calculus above is just the beginning. The required skill in today’s PBM procurement market is the ability to evaluate (and effectively communicating) the qualitative, strategic, and clinical capabilities of the PBM bidders to predict what the client is likely to experience in a working relationship and helping assess the best fit. Historically, PBM vendors have been largely evaluated purely based on financials. However, in recent years, our clients have experienced substantially different financial, clinical, and even legal and regulatory outcomes depending on their PBM of choice. Given our recent survey on PBM satisfaction, and the contrasting experiences clients have had with the same PBMs, there also does not appear to be a clear-cut, best-in-class PBM that meets every client’s needs equally. The objective, then, becomes finding the best fit PBM for your company’s hierarchy of pharmacy benefit goals, needs, and risks. These categories extend far beyond financial quotes and definitions to transparency, reporting, performance guarantees, member care, company culture, future plans, and restrictions on traditional PBM behaviors and strategies that don’t align. Success requires a well-crafted procurement process, inside and outside the RFP documents, focused on providing for the current and future needs of the plan, and giving plan sponsors the confidence that they have faithfully performed their fiduciary duty. However, the key is not only in collecting the answers, but also delivering the results in an easy-to-understand format that provides high level results, alongside detailed insights, specific to the plan sponsor’s needs.
Critical Question: Does your procurement process and reporting thoroughly evaluate non-financial data to properly evaluate each bidder’s approach, culture, and clinical prowess, beyond just financial guarantees?
5. Requirements Evaluated Match the Contract Negotiated
Far too often employers invest time and energy to ask questions, evaluate data points and debate PBM options to find that promises made during bidding do not align with the fine print in the first draft of the PBM agreement. Even more concerning is when an employer is not permitted to see the PBM agreement in a group purchasing arrangement. It takes a depth of expertise to not only identify misaligned contract terms, but also identify missing terms that create ambiguity after execution. An independent consultant, with no conflicts of interest, is in the best position to ensure the plan sponsor receives the same PBM product advertised during the procurement process, including a contract with the ability to enforce its terms.
Critical Question: Are all of the key issues and terms that were addressed in the procurement process also included in your PBM contract?
Don’t Compromise on Procurement, Set Yourself Up for Success
In today’s complex pharmacy benefits landscape, a quality procurement process is no longer a luxury; it’s a fiduciary necessity. The five aspects outlined above represent the foundation of a procurement that truly serves your organization’s unique needs, from customized vendor selection through contract negotiation that delivers on promised terms. As pharmacy benefit costs continue to rise and regulatory scrutiny intensifies, plan sponsors who invest in a comprehensive, independent procurement process position themselves for both immediate savings and long-term strategic success. The difference between a templated RFP and a thoughtfully crafted procurement could mean millions in savings and, more importantly, the empowerment to optimize your pharmacy benefit for the best interest of your organization and its employees.
Ready to ensure your next pharmacy benefits procurement meets these best-in-class standards? Connect with PSG’s procurement experts to discover how our independent approach can help you navigate the complexities of today’s PBM marketplace and secure the optimal pharmacy benefit solution for your organization.
