The role of PBMs in specialty drug management.

Specialty drugs now account for more than half of total pharmacy spend for most employer-sponsored health plans—and that share keeps climbing. The role of PBMs in specialty drug management has never been more consequential for employers trying to protect their budgets without sacrificing outcomes for the people who need these treatments most.

The challenge is that most pharmacy benefit managers (PBMs) aren't well-equipped to manage specialty drugs. Their financial structures create incentives that work against employers. Understanding how specialty drug management really works and where those incentives impact employers and members is the first step toward fixing it.

Key highlights:

• Specialty drug management is the clinical, operational and financial framework a PBM uses to oversee high-cost, complex medications from approval through ongoing member support.
• Specialty drugs represent a disproportionate share of pharmacy costs, making them the primary driver of year-over-year spend increases for employer health plans.
• Without transparent pricing and fiduciary alignment, PBMs can generate significant hidden revenue on specialty drugs through rebate retention, specialty pharmacy steering and opaque distribution arrangements.
• Rightway's fiduciary-aligned PBM model removes those conflicts entirely—delivering zero-markup specialty drug pricing, pharmacist-led member support and full claim-level transparency.

What is specialty drug management?

Specialty drug management is the structured approach a PBM uses to oversee high-cost, complex medications like biologics, oncology treatments and drugs like GLP-1s. It includes establishing coverage criteria, adherence monitoring and ongoing clinical support.

These aren't standard prescriptions. Some of the medications require refrigeration, specialized handling, regular monitoring and close coordination between the prescriber, pharmacy and patient. A well-run management program addresses all of it—not just the average cost of a specialty drug, but the full clinical and operational complexity that comes with it.

Why specialty medication management matters for employers.

Specialty drugs create risk on three fronts: cost, financial exposure and member outcomes. When any one of those isn't actively managed, the others get worse. Here's where the pressure shows up and why the structure of your PBM model determines how well you can respond.

Cost of specialty prescription drugs.

Specialty medications represent less than 2% of all prescriptions filled but account for more than 50% of total drug spend in most employer plans, according to AHIP. For many organizations, a single member on a high-cost biologic or oncology therapy can drive annual claims of six figures. Understanding the true drug price model behind specialty medications—what the employer actually pays versus what the PBM collects—is the only way to manage that exposure.

The problem isn't just that specialty drugs are expensive. It's that traditional PBMs profit from that expense. Rebate arrangements on specialty medications can be substantial and when PBMs retain a share of those rebates, the incentive shifts away from finding the lowest-cost clinically appropriate option and toward protecting high-rebate drugs on the formulary. Specialty drugs treat serious, complex conditions that often require long-term treatment.

Several factors make specialty drug costs particularly difficult to control:

• Per-patient annual costs can reach well into the six figures for many specialty therapies
• GLP-1s have rapidly become one of the largest and fastest-growing specialty spend categories
• Biosimilars can deliver meaningful savings, but only when formularies are designed to drive adoption

Financial risk for employer-sponsored health plans.

Without a structured program to manage specialty drugs, financial exposure is significant and largely unpredictable. Specialty spend tends to be concentrated in a small number of members, which means a handful of high-cost cases can move the needle on total plan costs in ways that are hard to budget for.

That unpredictability creates real risk. Employers operating without a spend guarantee or meaningful cost controls on specialty drugs are essentially absorbing an open-ended liability. The Big 3 PBMs generated an estimated $1.4 billion in spread pricing income on specialty generic drugs alone between 2017 and 2021, according to the Federal Trade Commission (FTC)—billing plan sponsors more than they reimbursed pharmacies and pocketing the difference.

The following issues make that risk worse when the wrong PBM model is in place:

• Specialty spend is concentrated in a small portion of the member population, making it hard to predict
• Most PBMs provide aggregate reporting that obscures where costs are actually coming from
• Without a contractual spend guarantee, employers have little protection against year-over-year increases
• Misaligned PBM incentives can quietly compound costs through steering, markups and rebate retention

Impact on employee access and outcomes.

High specialty drug costs don't just affect employer balance sheets. They affect members. When formulary design prioritizes rebate yield over clinical value, members may face coverage restrictions, non-preferred tier placements or burdensome prior authorization requirements on the medications their physicians prescribed.

The clinical stakes are high. For members managing cancer, autoimmune conditions or rare diseases, delays in access or unsupported transitions to alternative therapies can have serious health consequences. According to the American Medical Association (AMA), 94% of physicians report that prior authorization delays access to necessary care and nearly 1 in 4 say it has led to a serious adverse event for a patient in their care.

The downstream effects on members are significant and often avoidable:

• Access barriers created by prior authorization can delay or prevent treatment for members who need it
• Members without clinical support are more likely to abandon therapy, driving worse outcomes and higher costs
• Formularies designed around rebates rather than clinical value can limit access to the most appropriate treatments
• Proactive member engagement at the point of initiation meaningfully improves adherence and outcomes

PBM's role in managing specialty drugs.

The pharmacy benefits manager sits at the center of every specialty drug decision—from which medications are covered, to how they're distributed, to what clinical support members receive. How that role is structured determines whether specialty management works for the employer or against them.

Here's how PBMs manage specialty drugs in practice, and what separates a well-aligned model from one that creates more problems than it solves.

1. Overseeing specialty drug distribution and access.

Specialty drugs don't move through the same channels as standard prescriptions. Most require dispensing through specialty pharmacies—facilities equipped to handle cold storage, complex shipping requirements and the patient education that comes with high-risk therapies. PBMs build and manage the specialty pharmacy networks that determine where members can fill these prescriptions.

Many legacy PBMs own specialty pharmacies outright or have preferred distribution arrangements that steer members toward their own channels. As the FTC reports, pharmacies affiliated with the Big 3 PBMs received 68% of the dispensing revenue generated by specialty drugs in 2023, up from 54% in 2016. The result is a setup where the PBM profits from both the services side and the dispensing side—and neither source of revenue is transparent to the employer.

A well-structured distribution model addresses these conflicts directly:

• Specialty pharmacy network design directly affects where members can access their medications
• PBM-owned dispensers create conflicts between member access and PBM revenue
• Distribution arrangements should be built around clinical need and cost, not channel steering
• Transparent dispensing terms are the baseline for any accountable specialty program

2. Implementing utilization management strategies.

Prior authorization, step therapy and quantity limits are the primary tools PBMs use to manage specialty drug utilization. When applied correctly, these programs protect employers from unnecessary spending and ensure members are on the most appropriate therapy. When applied incorrectly—or designed around rebate considerations rather than clinical evidence—they become barriers.

Effective utilization management requires high-risk member engagement that goes beyond automated denial workflows. It means clinical pharmacists reviewing cases, working with prescribers to document medical necessity and supporting members through the prior authorization process so treatment isn't delayed.

The difference between utilization management that works and one that doesn't comes down to how it's designed:

• Prior authorization should be based on clinical evidence, not designed to protect rebate-generating drugs
• Step therapy protocols need to reflect current treatment guidelines and be reviewed regularly
• A well-managed appeals process catches inappropriate denials before they become care gaps
• Clinical pharmacist oversight makes the difference between utilization management that helps and one that harms

3. Negotiating pricing and managing rebates.

Specialty medications generate some of the largest rebate payments in the pharmaceutical supply chain. Drug manufacturers compete for preferred formulary placement by offering PBMs significant rebate deals. What happens to that money depends entirely on the contract structure.

Traditional PBMs retain a share of specialty rebates, creating a direct incentive to favor high-list-price, high-rebate drugs over lower-cost alternatives like biosimilars. Based on FTC findings, the Big 3 PBMs' affiliated pharmacies generated more than $7.3 billion in excess revenue on specialty generic drugs between 2017 and 2022—all while plan sponsor and patient payments increased at double-digit annual rates.

A fiduciary-aligned model changes the structure entirely—all rebates pass through to the plan, and formulary drug costs are driven by clinical value and net cost, not rebate yield.

Here are some things to consider on how rebates and specialty drugs work together:

• Rebate retention creates a structural incentive to favor high-cost specialty drugs over lower-cost alternatives
• Formulary design should reflect clinical value and net cost, not which manufacturer offers the largest rebate
• Full pass-through means every dollar negotiated on behalf of the plan actually reaches the plan
• Claim-level rebate reporting is the only way to verify that pass-through is happening as promised

4. Ensuring adherence and ongoing patient support.

Starting a specialty medication is only the beginning. Many of these therapies require months or years of consistent use to deliver the outcomes they're designed for. Members who don't understand their therapy, can't afford their cost-sharing or don't have clinical support when side effects emerge are far more likely to abandon treatment, which drives poor health outcomes and, often, higher costs downstream.

A strong specialty drug program treats adherence as a clinical priority, not an administrative checkbox. That means proactive outreach, copay assistance enrollment, side effect monitoring and direct access to a pharmacist when members have questions or concerns.

An effective adherence program is built around the following:

• Adherence support needs to begin at initiation, not after a member has already fallen off therapy
• Copay assistance enrollment removes a leading barrier to staying on high-cost specialty medications
• Side effect monitoring and clinical check-ins catch problems before they lead to discontinuation
• Long-term adherence is what drives the outcomes that specialty medications are designed to deliver

Key components of a specialty prescription drug management program.

An effective specialty drug management program covers five interconnected areas. Each plays a distinct role in managing cost, access and outcomes.

Challenges in managing high-cost specialty drugs.

Even with the right program components in place, managing specialty drugs creates real operational and financial challenges for employers. Pricing is opaque. Benefits are fragmented. Distribution is complex. And the PBM models most employers are working with weren't designed to solve these problems—in many cases, they profit from them.

Understanding where the friction lives is the first step toward addressing it. Here are the top challenges employers face when managing specialty drugs:

Limited visibility into specialty drug spend.

For most employers, specialty drug spend is a black box. They see aggregate totals and quarterly summaries, but not the claim-level detail that would tell them which drugs are driving costs, how rebates are being applied or whether the net cost of a given therapy reflects the best available pricing. That opacity is by design. Hidden margins on specialty drugs are one of the most significant sources of undisclosed PBM revenue.

Without claim-level visibility, employers can't verify that rebates are being passed through, can't identify where biosimilar substitution opportunities exist and can't make informed decisions about formulary design or benefit structure. The solution is better reporting structured at the claim level, reconciled against rebate activity and auditable.

Here is how visibility impacts drug spend:

• Aggregate reporting gives employers a total, not a picture of what's actually driving it
• Without claim-level detail, rebate pass-through is impossible to verify independently
• Biosimilar substitution opportunities are invisible without drug-level utilization data
• Meaningful oversight starts with the right data structure, not just more volume

Fragmentation between pharmacy and medical benefits.

Many specialty drugs, including infused biologics and certain oncology therapies, are administered in clinical settings and billed through the medical benefit, not the pharmacy benefit. That split creates a coordination problem.

When the PBM manages pharmacy and a separate carrier manages medical, there's no single lens on total specialty spend and high-cost site-of-care decisions often go unmanaged. This fragmentation is expensive. Without coordination across benefits, those decisions default to the path of least resistance, which is rarely the most cost-effective option.

This is why coordinated pharmacy and medical benefits are crucial:

• Infused and administered specialty drugs often fall outside the pharmacy benefit entirely
• Site-of-care decisions made without clinical oversight default to the most expensive settings
• Siloed benefit management makes it impossible to see or control the total specialty cost
• Coordination across pharmacy and medical is a prerequisite for real specialty cost management

Complex distribution and access barriers.

Specialty medications are subject to distribution restrictions that don't apply to standard drugs. Many are available only through limited distribution networks or a small group of specialty pharmacies authorized by the manufacturer to dispense the drug. These restrictions can create access challenges, particularly for members in areas with limited pharmacy options and they give PBMs opportunities to steer volume toward owned or preferred dispensers.

A well-run specialty program has clinical staff managing the prior authorization workflow directly, following up with prescribers, gathering required documentation and escalating when delays create clinical risk.

Here’s how distribution and access impact members:

• Limited distribution networks can restrict member access based on geography or pharmacy affiliation
• Prior authorization delays are one of the leading causes of specialty therapy abandonment
• PBMs with ownership stakes in specialty pharmacies have financial incentives to steer volume regardless of member need
• Active clinical management of the PA workflow prevents access gaps from becoming care gaps

Balancing cost control with patient outcomes.

Cost controls and clinical outcomes aren't inherently in conflict, but they can become that way when the wrong incentives drive program design. Step therapy that requires members to fail before accessing the right therapy, formulary exclusions that protect rebate-generating drugs and prior authorization applied broadly to avoid cost rather than ensure appropriate use all create the same problem: members pay the price.

These approaches reduce short-term spend but create real harm. Over 40% of commercial patients do not begin the oncology treatment their physician prescribed after a prior authorization denial or step therapy requirement, according to the AMA.

The balance of costs and outcomes is impacted by:

• Utilization management tools become barriers when they're designed around cost avoidance rather than clinical appropriateness
• Step therapy requirements that don't reflect current evidence delay effective treatment
• Formulary exclusions driven by rebate economics limit access to clinically important options
• The right measure of success is net cost and outcomes—not how many claims were denied

Emerging innovations in specialty drug management.

The specialty drug landscape is moving fast. New therapies are entering the market, biosimilar adoption is accelerating and employers are demanding more from their PBM partners. Here are the specialty pharmacy trends you can expect to emerge in the next few years.

1. Data-driven approaches to specialty drug optimization.

Analytics have always been part of PBM operations, but the depth and clinical utility of that data is changing. The most advanced programs now use predictive modeling to identify members who are at risk for specialty drug initiation, flag opportunities for biosimilar substitution and surface clinical intervention triggers before a member experiences a gap in care. That's a meaningful shift from reactive claims analysis to proactive clinical management.

Staying ahead of PBM trends in data and analytics matters because the volume of specialty data is only going to grow. Over the next decade, 118 biologics are expected to lose patent protection—representing a $232 billion opportunity for biosimilar savings—but 90% of those currently have no biosimilar in development, according to IQVIA. Employers need PBM partners who can translate data into clinical action as that landscape shifts.

Effective data-driven approaches include:

• Predictive analytics allow PBMs to intervene before high-cost specialty utilization becomes unmanaged spend
• Biosimilar opportunity identification requires drug-level data that most PBMs don't surface
• Claims patterns can reveal clinical gaps, adherence risks and cost optimization opportunities
• The next wave of specialty cost management will be driven by how well programs use data to act, not just report

2. Integrated pharmacy benefits and care navigation management.

The most significant shift in specialty drug management isn't happening at the formulary level. It's happening at the model level. Unified care navigation and pharmacy benefits—where the same clinical team that guides members to lower-cost providers also manages their specialty medications—produces better outcomes and lower costs than either function delivered in isolation.

When care navigation and pharmacy are integrated, the clinical picture is complete. A pharmacist supporting a member on a specialty biologic can also identify whether that member is overdue for monitoring labs, flag a site-of-care opportunity for an upcoming infusion or connect them with a specialist who has better outcomes data. That kind of coordination only happens when the two functions work together.

Fully integrated healthcare benefits impact costs and outcomes by:

• Integrated models give clinical teams a complete view of member health, not just pharmacy claims
• Care navigation and pharmacy working together close gaps that siloed programs miss
• Members get a consistent, coordinated experience rather than navigating multiple separate programs
• The best specialty outcomes come from programs where clinical support is connected, not fragmented

3. Advanced clinical programs and care coordination.

Clinical programs for specialty management are evolving beyond standard prior authorization and step therapy. The most sophisticated programs now include condition-specific management protocols, proactive outcomes monitoring and direct pharmacist-to-prescriber communication that keeps the clinical team aligned on complex cases.

These aren't call-center workflows managed by non-clinical staff. They require licensed pharmacists with the experience to manage high-risk members. Access to these kinds of healthcare benefits programs makes a real difference for members managing serious conditions.

Here’s how those programs benefit members:

• Condition-specific clinical protocols produce better outcomes than one-size-fits-all management
• Pharmacist-to-prescriber communication resolves issues that automated systems can't
• Proactive outcomes monitoring catches clinical problems before they escalate
• Licensed pharmacist oversight is the difference between a clinical program and a call center

4. Improved transparency in specialty drug pricing.

Regulatory pressure and employer demand are pushing toward greater pricing transparency in the management of specialty drugs. The trend is clear: employers are no longer willing to accept aggregated rebate summaries as evidence of value. They want claim-level detail, independent audit rights and contractual guarantees that reflect actual net cost rather than gross list price.

One area where this is moving quickly is biosimilar pricing. As biosimilars gain market share across major specialty categories, generic drug price dynamics are starting to apply to biologics for the first time. PBMs that have financial incentives to protect biologics because of higher rebate yields are going to find themselves on the wrong side of this trend.

The direction is toward net-cost-driven formularies, transparent distribution and full pass-through on specialty rebates.

Transparency in specialty drug pricing includes:

• Employers are demanding claim-level pricing detail, not quarterly summaries
• Independent audit rights are becoming a non-negotiable in fiduciary-aligned contracts
• Biosimilar adoption is accelerating the shift toward net-cost-driven formulary design
• PBMs with rebate retention incentives are structurally misaligned with where the market is heading

Manage specialty prescription drugs with Rightway PBM.

Specialty drugs are the highest-stakes part of your pharmacy benefit. They require clinical expertise, transparent pricing and a PBM model built around your interests—not one that profits from complexity. Rightway PBM is purpose-built to deliver all three.

Rightway operates with zero conflicts on specialty. No owned specialty pharmacies. No retained rebates. No spread on specialty drug costs. Every dollar generated on your plan flows back to you, with claim-level reporting to verify it. And because our clinical team is built around licensed pharmacists and pharmacy technicians—not a call center—members on specialty therapies get real clinical support from the first fill through ongoing adherence management.

Here's what employers get with Rightway:

• Rightway has no owned specialty pharmacies, no retained rebates and no spread on specialty drug costs—every dollar flows back to the plan, backed by claim-level reporting to verify it.
• Licensed pharmacists manage specialty member outreach, prior authorization and adherence monitoring from the first fill through the full course of therapy.
• Rightway's independent specialty pharmacy network is built around clinical need and cost, not PBM revenue, with no steering, no ownership conflicts and no hidden dispensing margins.
• Every specialty drug cost and rebate is tied back to the individual claim, giving employers the visibility to make informed benefit design decisions.
• SureSpend™ puts a contractual ceiling on total pharmacy spend, including specialty, so employers have real budget protection—not just a performance report after the fact.

Book a demo today and see how the Rightway PBM model can help your organization simplify specialty drug management.