PBM Illusions, Exposed

What Four Bold Employers Did—And Why Every Fiduciary Should Take Notice

Executive Brief

PBMs thrive on confusion. Bold employers are demanding receipts—and revealing just how costly that confusion really is.

For decades, PBMs have made billions through spread pricing, backdoor rebates, and contractual sleight-of-hand. But the illusion only works if you never look behind the curtain.

Now, some employers are asking. And what they’ve found should make every boardroom nervous—and every fiduciary alert.

This isn’t theoretical. It’s financial, legal, reputational—and deeply personal for fiduciaries.

PBMs routinely profit from undisclosed fees and misaligned incentives
Fiduciaries are responsible for the reasonableness of all plan expenses
Lawsuits are naming employers and individual executives and board directors for failing to monitor PBM contracts and payments
Reform isn’t optional anymore—it’s urgent

“PBMs like their contracts the way magicians like their long sleeves—always hiding something up there. The illusion fails when the audience figures out how the trick works.”

The PBM model depends on complexity, opacity, and inertia. But that model is collapsing under regulatory scrutiny, litigation pressure, and growing employer skepticism.

🔔 Big News: The playbook for PBM reform is being rewritten. Scroll to the end to see how you can be part of it.

What Happens When Employers Dare To Look

Four employers decided the status quo wasn’t good enough. They asked the hard questions—and acted. They recently shared their success stories on a PBM Hub panel titled Employer Journeys with Transparent PBMs.

Here’s how they did it—and why it matters.

7-Eleven | Mike Adams, VP of Benefits

7-Eleven isn’t just a convenience store chain—it’s a company with tens of thousands of lives covered under its health plan. Mike Adams, a seasoned benefits leader with over 40 years in the business, has helped lead a shift from status quo pharmacy benefits to strategic oversight. They rolled out a Centers of Excellence model, implemented a “Pharmacy CarePath” strategy, and refused to accept traditional PBM opacity.

“When I was at BCBS, I counted 22 sources of PBM profit—most clients had no idea. I hate the term PBM. It doesn’t mean anything anymore. The real function should be pharmacy benefit manager, not just processor.”

✅ Why It Matters: Even the most experienced benefits leaders are questioning old assumptions—and rewriting the rules on PBM oversight.

ELLWOOD Group | Carrie Rust, Director of Benefits

ELLWOOD is a manufacturing company with roughly 1,000 employees—and a big realization: they had no idea where their pharmacy dollars were going. Carrie Rust shared how the company moved from broker-led blind spots to real PBM transparency.

“It took courage to question what we’d accepted as ‘normal’. We brought in a transparent PBM and started seeing the real impact. Employees had better access to generics and lower-cost options. And we finally knew what we were paying for.”

✅ Why It Matters: Size doesn’t matter. Diligence does.

Rice University | Elaine Britt, Executive Director of Benefits

At one of the nation’s top academic institutions, you’d expect evidence-based rigor in benefits decisions. But even Rice had blind spots. Elaine Britt shared how they reassessed their PBM contract and realized the “black box” had to go.

“We realized we had no idea how the PBM was making money—or how they were incentivized. Transparency, audit rights, and control of our data were non-negotiables.”

✅ Why It Matters: Knowledge alone isn’t enough—governance, audit rights, and data access are what make fiduciary oversight real.

Credit Human FCU | Amy Hartman, Director of Total Rewards

This credit union is mission-driven and employee-focused. But their pharmacy program wasn’t measuring up. Amy Hartman described the lack of data, contract transparency, or clarity on value. So they changed.

“We switched to a transparent PBM and saw the difference almost immediately. More generic use. Better formulary alignment. Lower costs. We put in place the same fiduciary committee structure and rigor we used for our 401(k). You can’t advocate for your employees if you’re in the dark.

✅ Why It Matters: Values-driven organizations must align their pharmacy benefits strategy with their mission—or risk undermining both.

How These Employers Broke the PBM Spell

Each of these employers faced obstacles. Each proved it was worth it.

What separates these employers from the pack? For starters they:

Asked uncomfortable questions
Used data to drive decision-making
Benchmarked costs and contracts
Rejected vague answers from brokers and consultants
Made transparency non-negotiable
Built fiduciary processes that didn’t rely on blind trust

Key Takeaways

Want to keep your company out of court and your money out of someone else’s pocket? Ask the questions the panelists asked. And don’t settle until you get real answers.

The hidden cost of pharmacy benefits is no longer hidden—if you know where to look
Fiduciaries must demand transparency and validate vendor claims
Courageous employers are proving PBM reform is possible—and powerful

The real risk is staying silent while your plan overpays in the dark

The PBM Illusion Is Ending

The PBM model depends on complexity, opacity, and inertia. But that model is collapsing under regulatory scrutiny, litigation pressure, and growing employer skepticism.

Transparent PBMs aren’t just an alternative—they’re a fiduciary necessity.

🔔 Big News: The PBM Field Guide Is Coming

I’ve joined the Board of Advisors of Nautilus, the not-for-profit arm of Health Rosetta, to help lead the development of the PBM Field Guide—a first-of-its-kind blueprint for transparent, fiduciary-aligned pharmacy benefit procurement.

We’re rewriting the rules of PBM contracting—because “business as usual” is failing employers and employees. The era of PBM opacity is coming to an end—and we’re helping write the next chapter.

Launching at RosettaFest 2025 in Denver 8/24-8/27, the PBM Field Guide will help advisers and employers:

Use open source RFP language, contract terms, and transparent pricing standards
Make confident, compliant decisions in the best interests of plan participants
Avoid hidden fees, audit roadblocks, and rebate distortions
Build oversight systems that keep vendors honest—and participants protected

Join the Brightest Minds, Leaders, and Change Makers

Tired of the dark? Join us at RosettaFest 2025—and help build the future of pharmacy benefits. You’ll never look at PBMs the same way again.

💸 SPECIAL OFFER: Newsletter subscribers receive 10% off any Validation Institute service. Use code FIDUCIARY10 at checkout.

📬 PAY IT FORWARD: Feel free to forward this offer to your broker, PBM, or other vendors. Don’t hesitate to tell them you will favor validated vendors as part of your modernized procurement processes. Strong compliance and better benefits begin with validation.

Don’t be a bystander. Change the status quo and reap the benefits of The Health Plan Compliance Advantage.

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