Is your PBM fiduciary-aligned?

Most employers assume their pharmacy benefits manager (PBM) is working in their best interest. That assumption costs them. Traditional PBMs are built on a financial model that rewards complexity, rebate retention and spread pricing.

So what does a PBM, fiduciary-aligned and built to actually serve your interests, look like in practice? It earns a single flat fee, passes every dollar of savings back to you and has no financial incentive to inflate costs. This guide breaks down what that means, how the two models compare and what every plan sponsor should be asking before their next contract renewal.

Key highlights:

• A fiduciary-aligned PBM is contractually obligated to act in the plan sponsor's financial interest, passing 100% of rebates and eliminating all spread pricing.
• Fiduciary and non-fiduciary PBMs differ on one core question: who benefits when drug costs rise?
• Plan sponsors with fiduciary PBMs gain full claim-level visibility, independent audit rights and cost predictability that traditional models do not offer.
• Rightway is a fully transparent, fiduciary-aligned PBM with pharmacist-led care navigation built in, delivering an average 16.1% savings in year one.

What does it mean for a PBM to be fiduciary-aligned?

A PBM is fiduciary-aligned when it is contractually obligated to put your organization's financial interests ahead of its own. That sounds simple. In practice, very few pharmacy benefits managers (PBMs) actually operate this way.

Traditional PBMs generate revenue through a web of mechanisms: spread pricing on claims, retained rebates from manufacturers, preferred placement fees and markups on specialty drugs. Each one creates a direct conflict between what is good for the PBM and what is good for the employer.

When a PBM is fiduciary-aligned, none of that exists. The only revenue source is a flat administrative fee. Every rebate passes directly to the plan. Claims are processed at actual cost with quarterly audit-ready reporting down to the claim level. The PBM succeeds only when the plan does.

Fiduciary vs non-fiduciary PBM: Key differences.

The financial model of your PBM determines whose interests they actually serve. Here is how the two main approaches compare across the factors that matter most.

Benefits of PBMs with fiduciary-aligned, conflict-free models.

For plan sponsors and health plan administrators, the shift to a fiduciary-aligned model is not just a philosophical change. It has a direct, measurable impact on cost, compliance and the member experience. Here is what it delivers in practice.

Lower net prescription drug costs.

When a PBM has no financial incentive to steer members toward higher-cost drugs, drug pricing reflects actual net cost. Fiduciary PBMs with a proven record of employer cost control consistently outperform traditional models on total drug spend, not just list price benchmarks.

The urgency is real: According to the Business Group on Health, pharmacy spending now accounts for 24% of large employers' total healthcare dollars, and employers are projecting an 11-12% increase in pharmacy costs through 2026. A fiduciary model eliminates the structural reasons those costs inflate in the first place.

Full pricing transparency.

When a PBM is fiduciary-aligned, every claim is visible at cost. No blended rates, no aggregate reporting that obscures where the money actually went. Rightway's SureSpend™ model takes this further with a contractual ceiling on total annual drug spend. If actual costs exceed the guarantee, Rightway refunds the difference. If the spend comes in below it, the employer keeps 100% of the savings.

Demand for this kind of model is accelerating: 25% of large employers now have a transparent PBM program in place, and another 40% are considering implementing one within the next few years, according to Business Group on Health’s annual survey.

Better member experience.

Not all pharmacy benefits are designed with the member in mind. When a PBM profits from steering toward higher-cost drugs or owned pharmacies, formulary decisions stop being about what is best for the patient. That is what customizable, fiduciary-aligned PBMs for plan-specific adjudication actually deliver. Plan sponsors can design benefit structures around their specific member population rather than around what is most profitable for the PBM.

Formulary decisions are made on clinical merit and net cost, and members get the proactive support that encourages member benefits understanding rather than being left to navigate a system that was never designed with them in mind.

Reduced compliance and financial risk.

Fiduciary-aligned PBMs with built-in audit rights give employers the ability to verify every claim independently. That matters for Employee Retirement Income Security Act (ERISA) compliance, where plan fiduciaries are legally responsible for ensuring plan assets are managed prudently. Traditional PBMs often restrict or penalize third-party audits. A fiduciary model eliminates that risk entirely.

Staying current on PBM industry trends means understanding that audit access is not a feature — it is a baseline requirement.

How to evaluate a pharmacy benefit manager company on fiduciary alignment.

When selecting a pharmacy benefit manager, it’s critical to ensure it aligns with your team’s best interests. Fiduciary alignment means your PBM is committed to prioritizing your organization's best interests above its own. A fiduciary-aligned PBM eliminates conflicts of interest, provides full pricing transparency and ensures that all financial benefits, such as rebates or discounts, are passed back to you and your team.

Here’s a helpful checklist to assess your PBM. If you answer "yes" to any of the questions below, your PBM may not be acting in your best interest.

Drug classification.

How a PBM defines drug categories directly affects what your plan pays. Misclassifying a generic as a specialty drug can multiply costs without triggering any notification. Before you sign anything, understand exactly how your PBM classifies drugs and whether those definitions can change without your knowledge. The way generic drug pricing is structured in your contract is a common way hidden costs enter a plan.

To understand how drugs in your plan are classified, ask:

• Can your PBM change its definitions of specialty, brand, or generic drugs without notifying you?
• Does your PBM classify any generics as specialty drugs?
• Are there specialty drugs on your PBM’s list that could be accessed at standard retail pharmacies without special handling?

Formulary design and rebates.

The drug formulary is where misaligned incentives become most visible. A PBM that retains rebates has a direct financial incentive to keep higher-cost brand drugs on formulary, even when a generic or biosimilar alternative exists. This is one of the most common ways traditional PBMs extract value from plan sponsors without detection.

To ensure the formulary is built with your plan's best interests in mind, make sure you know:

• Does your PBM retain any portion of rebates or other payments from drug manufacturers instead of passing 100% back to your team?
• If both a brand-name and generic version of a drug are on the formulary, does your PBM favor the brand-name drug with higher rebates?
• Does your PBM avoid aligning formulary placement with the true safety, efficacy and net cost of drugs?

Pharmacy ownership and network steerage.

Vertical integration is one of the most overlooked conflicts in pharmacy benefits. It sounds like consolidation should lower costs, but when a PBM owns the pharmacies it steers members toward, the incentive is to drive volume, not value. Owned pharmacies often carry higher list prices, and employers end up paying more with no indication on their claims report of why. Members get directed to those channels because the ownership structure makes it profitable. That is how traditional PBMs inflate drug prices without ever having to explain themselves.

To understand if vertical integration impacts your plan, ask:

• Does your PBM own any pharmacies (retail, specialty, or mail-order) that may present a conflict of interest?
• Does your PBM limit access to independent or chain pharmacies within its network?
• Are your employees directed or steered towards pharmacies owned by your PBM, regardless of pricing at other pharmacies?

Pricing transparency.

If your PBM restricts what data you can see, you cannot verify whether you are being charged fairly. True pricing transparency means claim-level access, not summary-level reporting that obscures where costs are concentrated. And yet for most employers, getting a straight answer on what their PBM actually pays pharmacies versus what it charges the plan is surprisingly difficult. That difficulty is not accidental.

Your PBM model is not transparent if you answer “yes” to these questions:

• Is your PBM’s pricing structure based on spread pricing, rather than transparent pass-through pricing?
• Would your PBM restrict independent audits of Rx claims or plan management by a third-party consultant or auditor?

Contracts and reporting.

The contract is where a PBM's true incentives show up. Vague reporting rights, auto-renewal clauses, penalties for switching and restrictions on third-party audits are not standard boilerplate. They are designed to limit your leverage and keep you locked in. If your current contract makes it harder to leave, harder to see your data or harder to compare alternatives, that is worth examining before you sign the next one.

To understand whether your contract is working for you or against you, ask:

• Was your PBM the only option presented without consideration of other models (e.g., pass-through, fiduciary-aligned, or specialty carve-outs)?
• Are there limitations on your ability to receive timely reports?
• Are there financial penalties if you choose not to renew your plan?

Streamline your benefits with Rightway’s fiduciary PBM model.

At Rightway, we deliver a fiduciary-aligned PBM model that mitigates risk, maximizes pharmacy savings and drives every prescription to the lowest net cost. As the only PBM with pharmacy navigation built into our model, we guide members to the most cost-effective, high-quality therapies and channels.

The Rightway PBM model difference is structural. Rightway earns a single flat administrative fee. No spread pricing on any claim. No retained rebates. No owned pharmacies. 100% rebate pass-through with audit-ready, claim-level reporting every quarter. That structure produces real, verifiable outcomes for plan sponsors and their members.

Key features of Rightway's model include:

• A single flat administrative fee as the only revenue source, with no spread pricing and no retained rebates on any claim
• 100% rebate pass-through with contractual spend accountability, full claim-level transparency and quarterly audit-ready reporting
• No owned pharmacies and no supply chain conflicts, so every prescription is routed to the lowest net cost option
• A pharmacist-led clinical team that supports members in understanding and using their benefits, not navigating around them

Book a demo today and see how Rightway can help streamline healthcare benefits for your organization.