The Great PBM Pivot: Employers Increasingly Abandoning Industry Giants Amid Growing Calls for Reform

The landscape of American pharmacy benefits management is undergoing a quiet, yet significant, structural shift. For decades, the "Big Three" pharmacy benefit managers (PBMs)—CVS Caremark, Express Scripts, and Optum Rx—have maintained a near-hegemonic grip on the prescription drug supply chain. However, a seismic change in employer sentiment is beginning to fracture this dominance.

According to a landmark survey released by the National Alliance of Healthcare Purchaser Coalitions, employers are actively moving away from these dominant market players. As healthcare costs continue to consume larger portions of corporate budgets, the opaque nature of traditional PBM contracts is facing unprecedented scrutiny, forcing a re-evaluation of how organizations manage their pharmacy benefits.

The Core Data: A Market in Flux

The National Alliance’s "Pulse of the Purchaser" report, which surveyed 408 employers, provides empirical evidence of a shifting marketplace. In 2025, 63.4% of employers surveyed held contracts with one of the Big Three PBMs. By 2026, that figure plummeted to 54.3%.

This nearly 10-percentage-point drop in just one year is not merely a statistical anomaly; it represents a fundamental change in procurement strategy. The trend is most pronounced among smaller organizations—those with fewer than 1,000 employees—which have shown greater agility in pivoting to boutique, transparent, or "pass-through" PBM models.

While smaller firms are leading the migration, the behavior of larger organizations—those with 10,000 or more employees—tells a different, perhaps more consequential story. While they have been the slowest to switch, they report the highest level of intent to do so within the next three years. This "hesitation to act" is not a reflection of satisfaction, but rather a testament to the immense logistical complexity involved in moving a massive employee benefits program.

Chronology of Discontent: How We Reached This Point

The rise of the current PBM discontent did not happen overnight. It is the culmination of years of mounting frustration regarding drug pricing, rebate structures, and administrative complexity.

• The Consolidation Era (2010s): The PBM industry underwent massive consolidation, leading to the current Big Three structure. This scale brought efficiency but also created a "black box" environment where pricing mechanisms became increasingly difficult for plan sponsors to audit.
• The Transparency Movement (2020–2023): As drug prices for specialized therapies skyrocketed, employers began demanding more granular data from their PBMs. The term "spread pricing"—where a PBM charges a plan more for a drug than it pays the pharmacy, keeping the difference—became a focal point of legislative and corporate ire.
• The Federal Policy Push (2023–2024): With both the FTC and Congress launching investigations into PBM business practices, the spotlight on the industry grew brighter. This federal attention gave employers the political and social cover to reconsider their long-standing vendor relationships.
• The "Pulse of the Purchaser" Shift (2025–2026): The current period marks the transition from talk to action. Employers, emboldened by the success of smaller, more transparent PBM models, are now systematically reviewing contracts that were once considered untouchable "legacy" agreements.

Supporting Data: Understanding the "Black Box" Problem

The survey highlights a troubling lack of clarity within the industry. When asked about the specifics of their pharmacy contracts, roughly 23% of Big Three clients admitted they were "not sure" what was included in their agreements. In contrast, only 12% of employers working with smaller, independent, or transparent-model PBMs expressed similar uncertainty.

This discrepancy underscores the primary criticism leveled against the Big Three: that their contracts are intentionally complex to hide underlying profit margins.

Key Findings on Reform

The survey also ranked employer priorities regarding policy interventions:

1. PBM Reform: 87.6% of employers identified this as the most helpful potential policy change.
2. Hospital Price Transparency: 84.6% cited this as a high priority.
3. Drug Price Regulation: 83.8% supported broader federal drug price controls.

These numbers confirm that for the American employer, the PBM is no longer seen as a partner in cost containment, but rather as a primary driver of the very inflation they are struggling to control.

Official Responses and Industry Implications

The National Alliance of Healthcare Purchaser Coalitions, in interpreting these findings, noted that the scale of a company is the greatest barrier to reform. "Large employers show the strongest interest in changing PBMs, but they have moved the least so far," the report states. "That gap may reflect the scale of the decision: Larger organizations often use formal procurement cycles and need more time to evaluate pricing, operations, and member impact before making a change."

The Move Toward Transparency

To mitigate these issues, forward-thinking employers are demanding a new class of contract provisions, including:

• 100% Rebate Pass-Through: Ensuring that every dollar of a rebate negotiated with a drug manufacturer goes directly to the employer, rather than being retained by the PBM.
• Elimination of Spread Pricing: Moving to a "pass-through" model where the PBM is paid a transparent, flat administrative fee per claim, rather than profiting on the spread between the buy and sell price of a drug.
• Affiliate Disclosure: Demanding full visibility into whether the PBM is steering patients toward pharmacies owned by the PBM itself—a practice that critics argue creates massive conflicts of interest.

Implications: A New Era for Healthcare Purchasing

The decline of the Big Three’s market share suggests that the era of the "passive" purchaser is coming to an end. Employers are increasingly acting as "active consumers," taking control of their pharmacy spend with the same rigor they apply to other mission-critical business expenses.

The Impact on the Healthcare Ecosystem

1. Market Competition: The growth of smaller, boutique PBMs is fostering a more competitive environment. This innovation is forcing incumbents to defend their value proposition, which may eventually lead to more competitive pricing even among the legacy players.
2. The "Consultant" Role: Benefit consultants and brokers are finding their roles changing. Employers are no longer accepting the "recommended" PBM vendor without questioning the potential for kickbacks or hidden incentives.
3. Regulatory Pressure: The trend toward transparency is likely to accelerate legislative efforts. As more employers move to transparent contracts, the political argument for federal oversight becomes stronger, as the "market-driven" solution (switching vendors) is proving to be a viable path to lowering costs.

Challenges Ahead

Despite the positive momentum, obstacles remain. The consolidation of the PBM industry with insurance giants and retail pharmacy chains creates a powerful vertical integration that is difficult to disrupt. For an employer, the risk of "disruption" during a vendor switch—such as members having their medications denied or a pharmacy network becoming unavailable—remains a significant deterrent.

However, the survey indicates that the risk of staying put is now perceived as greater than the risk of changing. Employers are realizing that the status quo is not just expensive; it is structurally unsustainable.

Conclusion: The Path Forward

The data from the National Alliance of Healthcare Purchaser Coalitions paints a clear picture of a market undergoing a correction. The reliance on the Big Three is not just decreasing; it is being systematically dismantled by a coalition of purchasers who are tired of being kept in the dark.

For the PBM industry, the message is clear: transparency is no longer an optional feature—it is a requirement for survival. For employers, the journey has just begun. As they navigate the complexities of procurement, auditing, and member communication, the companies that successfully transition to transparent pharmacy benefits will likely gain a significant competitive advantage in their ability to manage healthcare costs and provide better, more affordable care to their employees.

The next three years will be critical. If the intent shown by large employers manifests into actual contract changes, we may look back at 2026 as the year the PBM industry was finally forced to put its clients—and the patients they serve—ahead of its own opaque profit margins.