North Carolina Employers Explore Transparent Pharmacy Benefit Managers Amid Cost and Compliance Concerns
In North Carolina, some employers and health systems are exploring alternatives to the dominant pharmacy benefit managers (PBMs) — CVS Caremark, Optum Rx, and Express Scripts — which processed close to 80% of U.S. prescription claims in 2024. This shift is driven by increased scrutiny of large PBMs over their opaque business practices, including allegations that they contribute to rising drug prices by retaining significant portions of negotiated rebates rather than passing savings to insurers and consumers. Smaller, more transparent PBM startups like Mark Cuban's Cost Plus Drug Company, Rightway, and Utah-based Scripius are gaining traction by promising full transparency and passing all savings directly to clients. UNC Health, for example, established its own PBM in 2019 to better control drug benefits for employees.
Nonprofits such as Durham's Senior PharmAssist contract with transparent PBMs like LucyRx, which charges per transaction rather than incentivizing use of higher-cost drugs. This allows local clinicians to select medications based on effectiveness and safety tailored for low-income older adults, without limited pharmacy networks or pressure to promote expensive drug alternatives. Senior PharmAssist also benefits from streamlined claims management and coordination to prevent dangerous drug interactions across pharmacies.
Despite these emerging options, many employers remain reluctant to change due to potential coverage disruptions and reliance on rebate checks from large PBMs, which can amount to millions. Legal concerns around fiduciary duties have further motivated some employer coalitions to consider alternatives. The North Carolina Business Coalition on Health has educated employers about PBM practices, noting that some companies have already transitioned to more transparent PBMs to better manage rising pharmaceutical costs impacting health insurance affordability.
Industry voices from the Pharmaceutical Care Management Association defend PBMs’ role in controlling drug costs, attributing price increases primarily to pharmaceutical manufacturers. They cite the growing number of PBMs as evidence of a competitive market that benefits payers and patients.
New North Carolina regulations enacted in July aim to enhance transparency and fairness toward independent pharmacies, aligning with practices of smaller PBMs like LucyRx. Stakeholders acknowledge that while PBMs play a crucial role in managing drug benefits, broader reforms targeting other middlemen—such as drug wholesalers and group purchasing organizations—are necessary to address systemic cost issues in the pharmaceutical supply chain.
Overall, interest in alternative PBMs reflects employer efforts to balance cost control, transparency, and employee satisfaction in health benefit management. Studies indicate over half of large employers nationally are considering PBM changes within the next few years, highlighting ongoing market evolution driven by demand for improved service models and greater pricing clarity.