An Open Letter to SmithRx Customers Regarding Recent PBM News

We're witnessing a watershed moment in the PBM industry. The media and government regulators’ intense scrutiny of traditional PBM practices isn't just making headlines—it's validating the very principles SmithRx was built upon.

Your partnership with us has placed you at the forefront of this industry-changing movement. You're not just witnessing history; you're helping to write it.

In recent weeks, many of you have reached out with questions about the surge in PBM coverage and its implications for your business. To address your concerns and provide clarity, let's examine some of the key stories making waves:

• The New York Times published a lengthy investigative piece on June 21st.

• The Wall Street Journal has published several articles, including: 
  • FTC to Sue Drug Managers Over Insulin Prices (July 10th)
  • How Drug Middlemen Keep Beating the System (July 10th)
  • Big Pharmacy-Benefit Managers Increase Drug Costs, FTC Says (July 9th)
  • Mail-Order Drugs Were Supposed to Keep Costs Down. It’s Doing the Opposite. (June 25th)

• Earlier this year, an employer was sued for breaching their fiduciary duty by selecting a misaligned PBM. STAT published an op-ed I wrote about that lawsuit here on June 12th.

• The FTC released an interim report on PBM malpractice on July 9th.

• There have been various articles about lawsuits against PBMs. 

This wave of news has sparked a crucial question among employers nationwide: "Are we being taken advantage of by our PBM?”

As a SmithRx client, you can take comfort in knowing you've already sidestepped the pitfalls of the legacy PBMs that are currently under scrutiny. These legacy PBMs - Optum Rx, CVS Caremark, and Express Scripts, often referred to as the "Big Three" - are owned by healthcare giants UnitedHealth, CVS/Aetna, and Cigna, respectively. Their practices have long dominated the American healthcare landscape, often at the expense of employers and patients.

SmithRx stands apart as a modern PBM. Our business model and practices are fundamentally different from those of the legacy PBMs attracting negative attention. By choosing SmithRx, you've aligned yourself with a transparent, client-focused approach that prioritizes your interests and challenges the status quo.

Legacy PBMs need to change. We are proud to be leading the solution and providing a fresh approach for our customers. What does that fresh approach mean in practice?

1. Legacy PBMs are opaque, SmithRx is transparent.
2. Legacy PBMs keep pharmacy spread and rebates, SmithRx offers a 100% pass-through model. 
3. Legacy PBMs are discount-based, SmithRx is cost-based (i.e. we find the lowest cost drugs, not the highest-discounted drugs).
4. Legacy PBMs subsidize big groups by overcharging small groups, SmithRx offers a universal deal to all clients.
5. Legacy PBMs have conflicts of interest caused by their vertical integration, SmithRx is conflict-free (e.g. legacy PBMs own mail-order and specialty pharmacies and steer patients there, we do not).

Our approach culminates in a PBM service that's fully aligned with your interests. We're committed to reducing your costs while ensuring your employees receive the high-quality healthcare they deserve. 

The recent media coverage and government scrutiny have opened up important conversations about the PBM industry. We see this as an opportunity to further demonstrate our commitment to transparency and client satisfaction. Whether you have questions about the recent news, the PBM industry in general, or your specific experience with SmithRx, we're here to provide clear, honest answers.

We encourage you to reach out with any inquiries or concerns. Your understanding and trust are paramount to us, and we're always ready to engage in open dialogue.

Thank you for being part of the SmithRx community and for joining us in reshaping the future of pharmacy benefit management.

Jake Frenz

CEO

SmithRx