$37 PMPM Savings: How the Drug Pathways Engine Proves Modern PBM Value
Written by
Alan Pannier
Nov 3, 2025
A new era of pharmacy transparency is upon us. It’s being driven by new direct-to-employer models and a singular focus of plan sponsors (and the modern pharmacy benefit managers that serve them) on the net cost of drugs. This shift challenges the status quo, forcing a reckoning with legacy PBM practices.
For years, many pharmacy benefit managers (PBMs) focused on opaque “negotiated discounts”, a practice that sidesteps the fundamental question of what is actually being spent on a certain disease state, or managed therapeutic area (MTA). Their primary value was tied to rebates, which often failed to lower the actual, final cost for the plan sponsor or the member.
At SmithRx, we believe in a modern, fiduciary-aligned approach. We use a cost-based focus to deliver demonstrable and sustainable savings, and we have the data to back that claim up.
Let’s take a look at how SmithRx’s Drug Pathways Engine proves the value of a true modern PBM.
The Fiduciary Mandate: Why Cost-Based Management Matters
Modern PBMs must be designed to eliminate conflicts of interest. This requires moving beyond the legacy model of chasing rebates toward a strategy of routing claims to the lowest-cost, clinically appropriate option available.
We embrace market shifts—like direct-to-employer (DTE) manufacturer programs and the fierce competition among biosimilars—as opportunities for our clients. Our goal is simple: Not to negotiate better discounts on an inflated list price, but to identify and route claims to the lowest net-cost pathway. This is the definition of true alignment and transparency.
This proactive approach is powered by the Drug Pathways Engine (DPE). The DPE is a strategic, proactive platform that connects members and plans with the lowest net-cost, clinically appropriate pathway available. It is the core mechanism that drives savings across every single MTA we see at SmithRx.
PMPM in Q3: Driving $37.61 in Savings
Our Q3 2025 data confirms the power of the DPE as a platform for plan and member savings and outcomes. The DPE was responsible for a 28% reduction in PMPM costs for our clients, translating to an impactful $37.61 per member per month (PMPM) savings.
Metric | Pre-Savings PMPM | Post-Savings PMPM | % Savings | $ Savings |
Total | $133.08 | $95.46 | 28% | $37.61 |
To understand where exactly this impact is realized, let’s examine savings across all MTAs:
Impact Across MTAs: Where the Drug Pathways Engine Shines
Autoimmune: Pricing Wars Deliver Massive Savings
The autoimmune class was the single largest savings category in Q3, delivering a remarkable $22.67 PMPM savings (that’s a 54% difference).
This massive reduction is a direct result of aggressive pricing wars amongst biosimilar manufacturers. A prime example is the entry of biosimilars like Starjemza, which has led to Stelara biosimilar pricing dropping sub-$500 per fill in certain markets. This competition, combined with our strategies of timely adoption, makes a massive difference in net cost to both plans and members.
Diabetes: Sustained Savings Through Strategic Selection
Diabetes continues to be an area of focus, delivering $2.99 PMPM savings (15%). These sustained savings are due to the continued uptake of lower-priced branded products in therapeutic classes like SGLT2s. By strategically utilizing these lower net-cost options, we maximize savings without compromising clinical efficacy.
With lower fiscal barriers to medications, members are able to better adhere to their prescriptions—and experience better health outcomes.
Migraines: Preparing for the Future of Low List Prices
The migraine class has already yielded high savings of 38% ($1.14 PMPM). Looking ahead to 2026, the large number of competitors in this space signals upcoming low list price opportunities. The Drug Pathways Engine is designed to swiftly adapt to these shifts, ensuring clients capture savings as soon as they emerge. We are excited about the programs we will be bringing forward in 2026.
Weight Loss: Anticipating Future Employer Needs
The weight loss category remains a complex area for employers, with over 90% of SmithRx clients currently excluding this coverage. Despite this, we still achieved $0.68 PMPM savings on the small percentage of covered claims.
Recognizing the rising demand for GLP-1s, we’re excited to offer low list price options for employers in early 2026, providing a fiscally sustainable way to address this critical therapeutic area.
If you’d like to learn more about our GLP-1 programs, check out our recent webinar with 9amhealth.
SmithRx is committed to leading the pharmacy benefits market in true transparency and cost-based practices. The nearly $40 PMPM savings achieved in Q3 2025 is a powerful indicator of what a modern, fiduciary-aligned PBM can achieve when it focuses on the net cost—not just discounts.
Ready to see how a cost-based approach can transform your plan’s benefits and budget? Speak with a SmithRx expert today to discuss how we can deliver demonstrable savings for your company.
Written by
Alan Pannier
Chief Strategy Officer, SmithRx
Alan oversees the company's pharmacy initiatives, including manufacturer relations, network management, and clinical solutions. His background includes clinical leadership roles at Magellan Health and Veridicus Health, as well as hands-on experience as a practicing pharmacist. Alan's academic credentials include an MBA and PharmD from Idaho State University, a Bachelor's in Chemistry and Business from Westminster College, and specialized training in managed care pharmacy. His comprehensive understanding of the industry drives SmithRx's innovative approach to pharmacy benefits management.
