What the arrival of alternative PBMs means for healthcare decision-making

When an employee picks up a prescription at the pharmacy, they’re not typically aware of the complex negotiations that took place behind the scenes to land on a price for the medication.

But HR leaders are increasingly placing these negotiations on their radars, in part due to scrutiny surrounding pharmacy benefit managers (PBMs). These intermediaries work with both drugmakers and insurers to determine how much health plans pay for prescription drugs, and are seen as part of the cost of doing business for benefits teams that oversee health plans.

The PBM industry is dominated by three major players—CVS’s Caremark, Cigna’s Express Scripts, and UnitedHealth Group’s Optum Rx—but that competitive landscape is beginning to shift, prompting some employers to look elsewhere. We talked to benefits leaders and healthcare consultants about what that transition entails, and why most employers are still sticking with the Big 3.

PBMs under scrutiny. In recent years, PBMs have come under scrutiny for allegedly artificially inflating the cost of drugs, giving special perks to their vertically integrated pharmacies and insurance companies, and pocketing rebates.

The Federal Trade Commission (FTC) got involved in mid-2024 when it released a report claiming PBMs have an “outsized influence” on drug prices. The agency released a second report in January 2025 claiming PBMs marked up prices for cancer, HIV, and other medications by “thousands of percent.” The agency ultimately sued the Big 3 PBMs over insulin costs in late 2024, and so far has reached settlements with both Express Scripts and CVS Caremark.

The FTC’s involvement, along with a bipartisan legislative push to break up vertical integration and increase transparency, brought national attention to PBMs’ role in drug pricing and affordability and has allowed alternative PBMs to make some headway into the market.

In a September 2025 report from the trade group the National Alliance of Healthcare Purchaser Coalitions, 61% of 324 employers surveyed said they had either switched away from a Big 3 PBM in the past year or were considering switching within the coming three years.

Enter alternative PBMs. A handful of such PBMs have caught employers’ attention, including AffirmedRx, Rightway Healthcare, and Navitus Health Solutions.

Some large employers have already made the change to these smaller, more transparent PBMs. Convenience store chain 7-Eleven switched to AffirmedRx in 2025, as did Purdue University in Indiana.

“Purdue sought a transparent PBM partner that clearly identified true costs, allowed the university control over prescription plan formulary decisions, and collaborated on wellness-focused programs,” spokesperson Trevor Peters told Healthcare Brew in a statement. “Since partnering with AffirmedRx, Purdue has updated its formulary, gained clear cost and utilization reporting, and launched a weight management program within its employer health clinic.”

7-Eleven did not respond to a request for comment.

Tyson Foods, which employs 116,000 people in the US, switched away from Caremark to Rightway in 2024, and drug manufacturer Eli Lilly, which employs 23,840 people in the US switched from Caremark to Rightway in early 2026.

What happens when employers leave the Big 3? Although a number of major employers have switched to an alternative PBM in recent years, they’re not inclined to speak about the decision on the record. Neither Tyson Foods nor Eli Lilly, for example, responded to requests to speak with us for this piece.

This may be in part because of legal risk, experts told us. In recent years, employers including JPMorgan and Wells Fargo have been sued over their PBM contracts, with plaintiffs alleging they perpetuated excessively high premiums and out-of-pocket drug costs.

Benefits leaders who were involved with decisions to stop working with a Big 3 PBM told us they did so over cost-savings concerns as well as customer service.

Before transitioning from CVS Caremark to CapitalRx in 2019, one of the primary challenges the nonprofit employee benefits provider Teamsters Health and Welfare Fund of Philadelphia & Vicinity encountered was related to appeals of prior authorization denials, Maria Scheeler, the fund’s executive director, said. These appeals would often get routed through the Teamsters, and it wouldn’t be clear if a member’s prior authorization for a prescription medication was denied because they didn’t meet the qualification or if there was simply a missing component, such as a lab result, she said.

“It created a very difficult administrative burden for us because we basically had to start at the very beginning…So it took a lot of a heavy lift on our part, and that was one of the biggest issues that I had,” Scheeler explained.

The fund, which oversees about 13,000 covered lives, has saved money since making the switch, according to Scheeler. From 2019 to 2022, per member per month pharmacy costs were lower than what the fund’s actuaries projected, with 2022 costs coming in nearly 17% below what was expected, she said.

Just as significant has been the improvement in customer service, she added. Whereas the fund used to field calls regularly when members’ prescriptions were denied, CapitalRx often troubleshoots these issues before they reach the Teamsters. “Unfortunately, in this kind of industry, hearing nothing means it’s working,” Scheeler said.

A complex decision. There’s no question that increasing scrutiny surrounding PBMs, coupled with the arrival of new entrants like CapitalRx, has made the process of evaluating these pharmacy intermediaries more complex.

Whereas PBMs used to be strictly within the purview of HR benefits teams, today it’s not uncommon for legal and compliance, CFOs, and even CEOs to be involved in these decisions, Alysha Fluno, a national pharmacy practice leader with the consulting firm Mercer, said.

And while finances still tend to be the most important factor for employers when evaluating PBMs, the lowest bidder may not automatically win, given these teams are also considering fiduciary responsibility and diligence in the current environment, she added.

Still, the Big 3 remain the leading choice for many employers, in part because they fear disruption, sources told us. Getting the savings that alternatives promise may require employers to change their formularies to emphasize generic drugs or biosimilars over brand drugs, and carefully monitor dosage, Rob Andrews, the CEO of Health Transformation Alliance, whose members are primarily publicly traded companies, said. “If shifting to save $7.5 million means there’s going to be a lot of employee unhappiness, a lot of companies won’t do it.”

On the other hand, helping employees save money on their medications may override concerns about disruption, Elizabeth Mitchell, president and CEO of the Purchaser Business Group on Health, whose members include large employers like Walmart and Boeing, said.

If switching PBMs “reduces a premium the following year or reduces cost sharing, that is pretty well received,” she said. “No one’s attached to their PBM, right? No one goes around saying, ‘I really want Express Scripts.’ They care about getting their medication at a fair price.”