“Understanding the Fine Print: How PBMs Pay Your Consultant”

⛔ Original post has been edited/removed due to cease and desist.

In its place, I am providing a resource for employers participating in Group Purchasing Coalitions through their broker/consultant:

1. Please provide a complete list of all third-party entities — including PBMs, coalitions, purchasing groups, and vendors — from which your firm receives remuneration tied to our plan activity (e.g., per-claim fees, rebates, data-sharing payments, service fees).

 Include the fee structure, amount received per unit (e.g., per prescription or per member per month), and whether this compensation is contingent on plan utilization or vendor selection.

2. Does our current PBM or vendor agreement include any compensation paid to your firm or its affiliates that is not disclosed on the 408(b)(2) or in our consulting services agreement?

 If yes, identify the payment streams, their contractual source, and the reporting mechanism.

3. Have you conducted an independent market check or benchmarking analysis within the last 24 months on our behalf that compares the total economic value (net cost, rebates, guarantees, fees, spreads) of our current PBM or vendor contract against at least three alternative arrangements — including direct PBM contracts, transparent pass-through models, or carve-out options?

 Please provide a summary of methodology and results.

4. Do you maintain any ownership interest, strategic partnership, or downstream compensation agreement with the coalition or group purchasing organization (GPO) we access our PBM contract through?

 If so, specify whether your firm (or any employee or affiliate) receives a share of administrative fees, formulary access payments, or contract renewal bonuses.

5. Have you reviewed — and will you provide us access to — the Master Services Agreement (MSA) between the PBM (or contracting entity) and your firm or coalition?

 If this agreement governs terms that are binding on our plan — including pricing, guarantees, audit rights, and financial arrangements — we require access to it as part of our fiduciary oversight. Specifically, please identify any provisions that:

▪️ Establish aggregate vs. client-specific pricing or guarantees

▪️ Limit audit rights or restrict access to claims-level or rebate data

▪️ Authorize payments to brokers, consultants, or other intermediaries

▪️ Contain nondisclosure terms that preclude you from fully informing us

▪️ Shift fiduciary or legal risk to the plan sponsor

If you do not have access to this agreement, explain how you are able to evaluate — or represent — that the arrangement serves our plan’s best interest.