How to Audit Your PBM Contract for Fiduciary Alignment

Is Your PBM Ready to Ride the Biosimilar Wave?

The “biosimilar revolution” (the wave of new biosimilar medications as alternatives to high-price biologics) is one of the greatest opportunities for plan sponsors to reclaim their budget over the next decade. As a pharmacist and clinical strategy leader, Alissa has seen a historic shift where brand-name reference biologics costing potentially hundreds of thousands per year can now be swapped with biosimilars for only a few thousand per year.

However, many PBM contracts are engineered to keep your plan from seeing these savings.

The White-Label Trap

Beware of vertically integrated PBMs that have started manufacturing or white-labeling their own biosimilars. In many cases, they favor their own high-cost versions of these drugs because their inflated costs can help the PBM meet rebates or discount guarantees, even if a lower-cost equivalent is available elsewhere.

"It's one thing to say you cover biosimilars. It's quite another to switch most of the patients to a biosimilar. A really high-level question is how many conversions you actually get from the branded products to the biosimilar product to see if there's operational alignment."

- Alissa Johnson, Senior Director of Clinical Strategy at SmithRx

Demanding True Fiduciary Alignment

Being able to have your plan capitalize on the savings, both for the business and for members, that biosimilars offer is dependent on your PBM having a foundational commitment to alignment. Push your PBM on where they’re sourcing their drugs and if they go beyond simply identifying savings. What is their ‘Switch Rate’ for biosimilars? Is the PBM operationally built to help get members onto these lower-cost medications? If not, the savings from biosimilars are likely staying with the PBM, not your plan.

"I think understanding whether or not [PBMs] are preferring their own product... and what it might mean if a PBM is preferring their own product with a high rebate or high WAC to a lower rebated product is incredibly important."

- Ann Lewandowski, Fiduciary Advocate

Is Your PBM Able to Sustainably Manage GLP-1 Demand?

If biosimilars were the ‘save’ trend for 2026, then GLP-1s are the “spend” side of the coin. These medications currently represent roughly 10% of total claims but are driving nearly 50% of the total drug spend increase for employers.

Just like so many things in healthcare, there isn’t a one-size-fits-all strategy for GLP-1s. Every patient is unique and every plan is unique. There’s no question that these medications are expensive and that there’s massive demand for them, but how your PBM responds to these macro and micro conditions can make all the difference in the sustainability of including GLP-1s in your plan. If you do decide to include GLP-1 coverage for weight management in your plan, be on the lookout for a PBM partner that:

• Is Innovating for Cost Savings: Having a PBM that’s free from conflict and is able to be totally flexible to find the lowest-cost drugs from the right source is crucial in GLP-1 sustainability. As new developments with Direct-to-Employer pricing come to light, it’s important that your partners can seek out those savings opportunities and are nimble enough to capture them for you.

• Has a Care Network to Support Success: Ensure your PBM has comprehensive clinical guardrails. This includes utilizing obesity-trained care partners and clinically-appropriate prior authorizations (PA) to ensure these medications are used for their intended metabolic indications, protecting the plan from unmanageable fiscal "whiplash."

“GLP-1s are responsible for half the increase in drug spend... working with partners who can make sure that the right patients are getting access to the medications and then also who could use this direct-to-employer program... can really make a difference for how you cover the drugs and what the spend is over time."

- Alissa Johnson, Senior Director of Clinical Strategy at SmithRx

Stop Placing Losing Bets on Misaligned PBMs

If your PBM’s contract and business structure isn’t built to handle the rigorous demands of 2026 and deliver the lowest-net cost for your plan, you’re taking a real chance on them. 

“Let's remove health plans from everything. Let's say your Uncle Joe wants to set up a trust for you. Uncle Joe can make up whatever he wants, but then he hires Aunt Suzy to administer this trust. She has to act in your interest and cannot take all the money and go to Las Vegas and spend it. And so when you're thinking about your PBM, you don't want it paying roulette with your plan assets or taking them to Vegas.”

- Ann Lewandowski, Fiduciary Advocate

In 2026, many employers are discovering that their PBMs (the "Aunt Suzys" of the world) have stopped acting in the plan’s best interest. With the explosive cost of GLP-1s and the massive savings potential of biosimilars, your contract is no longer just a legal document; it is your primary tool for ensuring your PBM practices fiduciary alignment. If your contract isn't engineered for alignment, you may be making a losing bet.

What Fiduciary Alignment Means to a Modern PBM

To navigate the quickly changing world of pharmacy benefits effectively, you need the right partner by your side. Finding the right partner means being extremely critical of your contract and the core practices of PBMs.

At SmithRx, we believe that fiduciary alignment is one of the non-negotiable pillars of doing business as a modern PBM.

“We truly want to find the lowest cost product... to get there, you need to also be 100% pass-through. In order to make it clear that we're aligned, it's important to have data behind this. We make the data readily available, we're radically transparent so that it's very clear how much the drugs cost."

- Alissa Johnson, Senior Director of Clinical Strategy at SmithRx

Doing what’s best for your plan doesn’t mean being confrontational; it means being diligent. As Ann Lewandowski suggests, it’s time to "challenge your vendors in the nicest possible way" to prove they are delivering on their promise.

The stakes are too high to place your bet on “black box” PBMs. Take the chance out of pharmacy benefits: seek out truly aligned partners who have clear, upfront contracts and models that you can easily evaluate. 

If you’d like to learn more about Ann’s work as a Fiduciary Advocate, check out her Substack. You can dive even deeper into Alissa and Ann’s full discussion in our complete webinar, Take Control of Your Contract: Navigating Fiduciary Alignment, Biosimilars, & GLP-1s.

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