5 Ways Fiduciary‑Aligned PBMs Deliver Transparent Pricing in 2026

2026 has seen sweeping changes to the pharmacy benefit industry. From increased media attention to rampant misalignment to reform legislation passed by Congress, the Pharmacy Benefit Management (PBM) landscape has reached a definitive turning point.

Employers are no longer accepting opaque practices and black box models. Transparency is now a requirement, both from a business and regulatory perspective. To keep up with reform and industry trends, the market will need to move toward fiduciary-aligned PBMs. These are entities that operationally align their interest with those of the plan sponsor or employer. Modern, fiduciary-aligned PBMs meet the demand for transparency, compliance, and financial control that are now requirements for responsible plan management.

To navigate the PBM landscape effectively, it helps to speak the same language as the different PBM providers. The gold standard for benefits managers is the fiduciary-aligned PBM, a partner that aligns their revenue structures to not contradict the performance of the plan. In simpler terms, the PBM doesn’t make money when plans pay more for drugs. This alignment is made possible by rebate pass-through, a practice ensuring that 100% of manufacturer discounts are returned to the employer, and the total elimination of spread pricing (where PBMs pocket the hidden markup between pharmacy costs and plan bills). By replacing these opaque revenue streams with clear, fixed administrative fees, fiduciary-aligned PBMs shift from being simple middlemen to transparent service partners.

1. The 100% Pass Through Pricing Model

One of the cornerstones of fiduciary alignment is the 100% pass through pricing model. In this structure, the PBM bills the plan sponsor the exact amount it pays the pharmacy, plus a transparent, fixed administrative fee, while passing 100% of rebates back to the sponsor. This eliminates the spread pricing revenue, ensuring the PBM does not profit from inflated drug costs.

Modern PBMs like SmithRx have built their entire value proposition on this foundation of radical transparency. By removing the incentive to push higher-cost drugs to capture a larger spread, the PBM becomes a partner in cost suppression rather than a beneficiary of cost inflation. Even some legacy giants have begun to pivot in response and now claim to be ‘pass through’, though are still a long way off from being truly transparent.

Legacy, Discount-Based Pricing vs. Cost-Focused, Pass Through Pricing

2. Full Rebate Return and Pricing Transparency

In legacy models, manufacturer rebates often are partially retained by the PBM. Fiduciary-aligned PBMs utilize rebate pass-through, remitting 100% of all manufacturer discounts, rebates, and incentives back to the plan.

Full disclosure and pricing transparency is vital because rebates can account for a significant portion of the net cost of a drug. Fiduciary-aligned models provide clear documentation, ensuring the plan sponsor captures the full financial benefit. Without this transparency, a PBM might prefer a drug with a high "sticker price" and a high rebate over a cheaper alternative, simply because they can keep a portion of the rebate.

3. Transparent Administrative Fees

Fiduciary-aligned PBMs replace opaque, legacy revenue streams with transparent administrative fees. Instead of earning money through rebate retention or spreads pricing, the PBM is paid a pre-set dollar amount, typically on a permember per month (PMPM) basis.

This fixed pricing structure supports employer budgets and plan sustainability. When a PBM's revenue is decoupled from the price or volume of drugs dispensed, they have no incentive to encourage over-utilization or the use of expensive brand-name drugs when more cost-effective, clinically-appropriate alternatives are available.

4. Claims-Level Visibility and Real-Time Reporting

Transparency is impossible without data. Fiduciary-aligned PBMs provide claims-level visibility, giving employers access to real-time analytics. This allows sponsors to reconcile costs and verify savings as they happen, rather than waiting for an annual report.

Core Data Fields in Transparent Reporting:

• Drug Dispensed: Name and NDC (National Drug Code).

• Pharmacy Info: Where the drug was dispensed.

• Actual Cost: The exact amount paid to the pharmacy.

• Rebate Info: The specific rebate amount attributed to that claim.

• Member Spend: The copay or coinsurance paid by the employee.

5. Flexible Carve-Outs and Transparent Specialty Drug Pricing

As more and more pharmaceutical advances come to market, the responsible management of specialty drugs (such as GLP-1 therapies for weight management) has become the top priority for plan sponsors. Fiduciary-aligned PBMs allow for flexible carve-outs or program structures, where specific drug categories are managed separately to optimize costs.

Beyond simple exclusion, sponsors can use specialized care vendors to manage clinical necessity and transparent pricing, ensuring that these life-changing but expensive therapies do not place unmanageable burden on the plan.

Frequently Asked Questions

What is a fiduciary-aligned PBM and why does it matter?

A fiduciary-aligned PBM is designed to align its financial interests with the plan sponsor. It matters because it delivers transparent pricing, full rebate pass-through, and true cost control, helping employers provide competitive benefits while reducing pharmacy spend.

How can employers verify transparent pricing from their PBM?

Employers can verify transparency by demanding detailed claims-level reporting, ensuring their contract includes audit rights, and requiring a full accounting of all manufacturer rebates and pharmacy reimbursements.

How do fiduciary-aligned PBMs handle rebates differently from legacy models?

Fiduciary-aligned PBMs pass 100% of manufacturer rebates directly to the plan sponsor and provide full documentation. Legacy models may retain a portion of rebates or obscure the total amount of money received from manufacturers.

What role does claims-level data play in managing pharmacy benefit costs?

Claims-level data provides a "receipt" for every transaction. It allows employers to see exactly what the pharmacy was paid versus what they were charged, enabling them to audit performance and identify plan waste.

The age of the "black box" PBM is over. By choosing a fiduciary-aligned partner, you’re reclaiming control of your bottom line and ensuring that every dollar spent actually goes toward member benefits rather than a middleman's margin.

Want to reap the benefits that modern PBMs can bring to your next RFP cycle? Get our Ultimate Pharmacy Benefit Manager Evaluation Guide for actionable tips to select the right partner for your benefit needs.