The Prescription for Change: Moving Beyond the PBM Model

Snezana Mahon: Pharmacy is the number one most talked-about topic right now in the industry—and it has to be. Employers are spending more today in 2026 on pharmacy benefits than they have ever spent before. Yet employers are asking fewer questions than ever before about these benefits. And so today, the esteemed panel that I have here is going to change that. We're going to talk about some of the tough questions that employers should be asking—what their journey ultimately needs to be—as we are now moving to this model of prescription for change.

Snezana Mahon: There's so much innovation happening in the industry right now with prescription drugs, and we want to make headroom for the incredible pharmacological innovation that is coming our way over the next decade. We have to fix the current state in order to make room—and funding—available for the cures that are coming as the evolvements are happening in the industry. So I'm going to start the conversation, and this is going to be a two-part discussion. First, we're going to start with an employer point of view, and then we're going to move into a consultant point of view and the role that they play in guiding and advising employers over the next decade when it comes to selecting pharmacy benefits.

Snezana Mahon: So, Margo, I'm going to start with you. You recently went through a big pharmacy/PBM transition change.

Margo Quinlan: I did

Snezana Mahon: And I would like for you to share with your fellow colleagues the why. What was the impetus for that change? What was that process like within your own organization? And what was it about the status quo model that no longer fit Advantage Solutions' needs and your members? We'd love to hear from you.

Margo Quinlan: Great. First, I'm supposed to introduce myself. I am Margo Quinlan, the Senior Vice President of Total Rewards for Advantage Solutions. We are a 70,000-employee (teammates, we call them) global company. We have various businesses all around supporting retailers—both on the retail side and also on the manufacturer side—helping them to either get their products on shelves.

Margo Quinlan: Our most visible group is: we employ the product demonstrators at Costco worldwide. So whenever you go to have a quick bite to eat at Costco, it's one of our employees. And that's just a piece of what we do, but that's our most visible piece. Snezana has asked a very, very loaded question. So the first part was again, Ms. Snezana?

Snezana Mahon: Yes. The first part was: what was the first drive for change, and what was it about the status quo model that you might have had before that forced you to rethink what you had in pharmacy benefits?

Margo Quinlan: Sure. We went into our RFP this spring with really a pretty small scope, which was just to validate that the PBM that we had—from a fiduciary perspective—was the right PBM, as they were aligned with our current consulting firm. And it grew when we made a decision that we needed to really think outside the box and really think through what it was that we need to look at from a health and welfare and an Rx perspective.

Margo Quinlan: Like everybody else probably in this room, we've had excessive increases—particularly in late 2024 and early 2025. And so we made the decision to do the RFP full-blown for the Rx transition.

Margo Quinlan: We made a conscientious decision to invite an equal share of transparent PBMs as well as the big three. We did that intentionally because we wanted to start looking at what the options were related to the differences in the smaller transparent PBMs. We were pleasantly surprised at our decision. At the end of the day, as you guys have probably figured out, we did go with TransCarent, effective 1/1. So we're a very new client.

Margo Quinlan: Some of our rationale for going with them was really the simplification of the way you deal with Rx. It was very, very simple. How TransCarent gets paid is very, very simple. It doesn't matter how many prescriptions are filled, where they're filled, who they're filled with, and what modality they're filled. So it provides an incentive for them to ensure that we are getting the right drugs in the right teammates' hands at the best cost.

Margo Quinlan: That was very, very important to us—that when you have simplification, you have more transparency. Another key aspect that we liked about the TransCarent model was really from the teammate perspective. We've had for several years Accolade navigation, and we did some other things this year that were kind of parallel to this.

Margo Quinlan: But we really liked the fact that our teammates would have one app in which to do all of their navigation associated with their health plan—telemedicine. We did end up adding MSK and cancer (which I know this isn't about), but then separately we added Rx. So now our teammates had a single, seamless way in which to interact with experts to help them navigate their care.

Margo Quinlan: We love the way that a teammate could actually go on the app and choose where they want to get their medication filled based on personal preference and based on cost. So there's no restrictions—no requirements—about whether you get it through mail order or, for the most part, what retail pharmacy you have. The power is in the teammate's hands as to how and where—and how much—they pay for their medications.

Margo Quinlan: We also liked—because TransCarent doesn't have any skin in the game when it comes to rebates and manufacturers and owning biosimilar companies that are maybe not giving us the best price because it's another revenue stream for the big PBMs—they truly are, so far (and we're very new in our relationship with them on this), demonstrating that they are here to help us find the drugs at the best price for our teammates. And that was a very interesting value proposition, both from a financial perspective for our organization as well as from a teammate perspective.

Snezana Mahon: That's great. And, Margo, do you want to share a little bit more about the importance of not just the digital experience, but the operating model behind it? I remember when I met you for the first time, you were challenged with: your members didn't have access to Amazon, Mark Cuban Cost Plus Drugs—that choice architecture of the network and the operating model. Can you share more about why that was important for your teammate experience and the expansion of network? It's not constriction, but expansion.

Margo Quinlan: Because my CEO said so. No—I'm totally teasing. I will say that a representative from Mark Cuban did reach out to my CEO. My CEO is a very, very innovative change agent in whatever industry he's working in and expects everyone to be a change agent as well.

Margo Quinlan: So he teasingly sent me this email and said, "Hey, can we get Mark Cuban's Cost Plus Drugs part of our program?" And of course, the PBM we used said, "Thank you, but no thank you. We're not going to do that."

Margo Quinlan: So to have that level of options—GoodRx, Mark Cuban, being able to access Amazon Pharmacy—all of these different methodologies and ways in which we put the tools in the teammates' hands to help them feel more comfortable that they're getting the best deal that they can.

Margo Quinlan: Because previously, they had no idea. They just went to a pharmacy, they paid whatever it was they were going to pay, and they really didn't know if they could go down the street and get it better, or maybe mail order is better for them—or maybe they don't want mail order and there's no requirement.

Margo Quinlan: And you're right—there are very, very few retail pharmacy restrictions in the network. So they really can, if they feel comfortable, use the mom-and-pop up the street, and they can see—before they go into the pharmacy—what they're going to pay. And to me, that is just monumental: to put that kind of power in their hands. Snezana Mahon: And then final question before we move to the next set of questions—specific to fiduciary responsibility. It's top of mind for every single employer, your legal teams. And to have the transparency and flexibility of really owning your plan—owning your drug list, owning your formularies—not being prescribed on what you can and can't do.

Snezana Mahon: Can you talk a little bit more about the challenges that you had and why that was important for you, your CFO, your legal team—on how to really be a fiduciary—and the need to move to a transparent model?

Margo Quinlan: Yes. You have a better relationship, and everything is visible to you. You don't have to worry about what's under the covers. You know—where is it—I like to refer to it as the whack-a-mole. When you're doing an Rx negotiation: well, they're going to reduce the price here, but you know it's going to go up here.

Margo Quinlan: With a transparent model, you know exactly what you're going to pay. You know exactly what the rebates are going to be. You know exactly what you're going to be paying your partner—I'll call them a vendor; it's more of a partner.

Margo Quinlan: And everybody's payment structures are aligned together to provide clear, consistent, low-cost medications in a way where you can manage your formulary. So there's not an exclusion because someone's made a sweet deal over here and there's a lot of rebates being held.

Margo Quinlan: I would like to have my money today—not three months or six months or twelve months down the road when they send me this big, fat rebate check. They're really just hanging on to my money for a year, and I would rather have that now. I'd rather understand day in and day out, and month in and month out, what our true costs are versus not being able to align those big, fat pharma rebate checks that come in so late.

Margo Quinlan: So it makes me feel better as a fiduciary to know that everything is transparent. I can ask a question and I can get a direct answer as to what the cost of this is, what the cost of this is.

Margo Quinlan: And we are also in control of our formulary. I don't have my PBM tell me I'm going to put a GLP-1 on the preventative drug list. And this is a true fact with my organization. Those things don't make sense to me. So having that is very nice.

Margo Quinlan: Now, with having that, it also means you have to be willing to accept that you are going to be a stronger fiduciary—you have more input, and you also have more responsibility with ensuring that the decisions you make are the right decisions on behalf of your teammates. You're not relying as much on this PBM to tell you what they think is in the best interest, from a fiduciary perspective, for you. So there's more responsibility attached to that as well.

Snezana Mahon: I love that. You're in control and you also are accountable for those decisions. Jonathan from FIS couldn't be here today, and he sent us a short little video. So if you can move to the next slide and just play that.

Jonathan Hayes: Hi, everyone. My name is Jonathan Hayes, Head of US Benefits and M&A and part of our global people team at FIS. I'm really sorry I can't be there with you all in person. Voyages is an amazing conference, and I was really looking forward to joining all of you.

Jonathan Hayes: At FIS, this year kicked off with something really big for us: the launch of the full TransCarent experience for our employees—what we call FIS Wellness powered by TransCarent.

Jonathan Hayes: Our goal was simple: create a health care experience that's clearer, easier to navigate, and honestly, just better. Like many employers, our timeline moved fast—super fast. September comes quickly, and a few decisions had to be made later than planned. Despite that, TransCarent moved mountains and really stepped up.

Jonathan Hayes: In a short amount of time, we moved our pharmacy benefit from CVS Caremark to TransCarent, transitioned second opinions for My Medical Ally, and rolled out wayfinding, surgery care, cancer care, and weight health.

Jonathan Hayes: It was a lot to take on, but TransCarent absolutely delivered. And the employee feedback so far has been absolutely tremendous. To that point, one decision I want to highlight is our move to a transparent PBM. Shifting away from a traditional PBM is a big deal—a really big deal. And most organizations stay with the same model for years, if not decades.

Jonathan Hayes: But when our CHRO, our team, and I stepped back, it became clear that the traditional approach just wasn't sustainable. We needed something that drove savings for the organization, our employees, and created a more connected pharmacy and care experience for everyone.

Jonathan Hayes: And in just two weeks, we're already seeing that change come to life. It's super exciting. Employees are choosing lower-cost options like Mark Cuban Cost Plus Drugs and Amazon Pharmacy—which means real savings for them and for FIS.

Jonathan Hayes: At the end of the day, we made a bet: if we gave people transparency and also easy access to compare prices and shop for the best options available to them, they'd make smart choices—and they are. The data speaks for itself. People are clicking, comparing, and taking action in real time.

Jonathan Hayes: Now let's talk stats for a moment. Two weeks into the launch, more than 20% of our population has already downloaded and activated the TransCarent app. That early engagement didn't happen by accident. It took a lot of intentional work.

Jonathan Hayes: We partnered closely with TransCarent on a focused 3-2-1 countdown campaign leading up to January 1st, which included creative emails from our Chief People Officer, short videos, and clear messaging about what was changing and why. That early education has really paid off.

Jonathan Hayes: The energy across FIS is real, and even our CEO has commented on the excitement and the momentum. It's been amazing.

Jonathan Hayes: And there's more to the story. In addition to everything we launched on January 1st, we also completed an $11B acquisition, which meant we essentially had two launches: January 1st and January 9th, when the deal closed. And through all of it, TransCarent has been an incredible partner who has helped us deliver on all of our goals.

Jonathan Hayes: At its core, this is about reimagining how people experience health care. Historically, it's been reactive, confusing, and often frustrating. We wanted something proactive—something there for people before they even realize they need it.

Jonathan Hayes: People already want or need to use health care, as we all know. We don't have to incentivize for that. What they do need is a better experience. And seeing 20% engagement in a little over two weeks tells us we're on the right path.

Jonathan Hayes: Our goal is now to reach 80% to 100% engagement by the end of the year, and I know we can do it along with TransCarent support. That's the experience we set out to build, and it's what TransCarent has helped us bring to life.

Jonathan Hayes: Thank you to all of you for your time, and I hope you all have an amazing Voyages conference. I look forward to meeting all of you next year.

Snezana Mahon: Well, that was Jonathan's point of view. And thank you, Margo and Jonathan. What you just heard were two employers that I truly consider change makers—some of the most progressive leaders in the industry—who are no longer willing to accept the status quo. So thank you for leading the way.

Snezana Mahon: Switching gears a little bit, I want to talk to our esteemed panel of consultant leaders and experts—pharmacists—who want to share their point of view and the role that each of you are playing and that each of you in the audience are entrusting to guide and help your way.

Snezana Mahon: Michael, do you want to talk a little bit about what transparency means at PSG and value-based thinking and where the future needs to go?

Michael Lonergan: Yeah, sure. Thank you. So—Mike Wanner again. I'm technically a pharmacist, but probably not qualified to provide clinical advice at this point. But I have the privilege of leading Pharmaceutical Strategies Group. We're a relatively small but mighty boutique firm that is solely focused on pharmacy benefit management consulting.

Michael Lonergan: When I think about transparency, I sort of think about it in super simple terms. Although there are a lot of different ways of looking at it, to me, if you don't have transparency, it's hard to make value-based decisions.

Michael Lonergan: Every day, every decision we make is technically some form of value-based decision, no matter what we're doing, and pharmacy should be no different. But if you don't know what the actual net cost of a drug is, or you don't know its effectiveness or comparative effectiveness to other drugs, or you don't know the difference between the cost of the drug and the cost of the service that you're paying a PBM, you've got a problem in making value-based decisions. So to me, that's the fundamental background and importance of having transparency in your pharmacy agreement.

Snezana Mahon: 100%. Regina, do you want to comment about employer readiness to drive change and disruption—and what does that look like?

Regina Ihrke: I've been pretty focused on what disruption means right now. In the research, it looks like employers say that over 30% of them believe they're going to make disruptive changes in the next three years. And I was like: that's pretty fascinating. What does disruptive changes mean? Is it really in the eye of the beholder?

Regina Ihrke: Because I'm not the pharmacist—I just want to make sure that I'm the actuary in the room here. But I work on a lot of organizations, and disruption may mean a $100 change in the deductible. I think some of you could probably feel that that's disruptive because you're really thinking about that member, right?

Regina Ihrke: And I don't think right now that's going to move the needle on where the system is going—where amazing health care is also going—at this very rapid pace. So there is this piece of: what does disruptive changes mean?

Regina Ihrke: And what we're hearing more and more right now is employers saying: push us, ask us, tell us to go to something that's maybe not been stable for 30 years and help us figure out that journey—and we may have to take some risks.

Regina Ihrke: So that's what disruptive is going to look like and feel like in the next years. I think we all have to lean in—maybe not be so conservative like the actuaries (like usually I am)—and really see how we can manage the cost line, but also not disrupt that amazing signature experience that you're trying to get to these employees and their members, especially those that we would consider medically fragile.

Regina Ihrke: I'm really passionate about: don't give homework to those that are medically fragile out there. They are suffering with enough, and we need to support them and the partners to get them through that journey as quickly as possible.

Snezana Mahon: Absolutely. Ellen, do you want to talk a little bit about questions that employers should ask themselves if they haven't considered going down a transparent pharmacy journey—what should they be asking—and how do you guide them as a consultant on their readiness status to say, "Yes, I'm ready to issue an RFP. What should I be looking for in that RFP, and what does that end outcome really look like?"

Ellen Verzino: Sure. I work for Lockton, which is the world's largest privately held consulting company. And I think, like others have said, we really pride ourselves in taking the client's challenge. We've got mostly smaller to mid-sized clients, but are really gaining from the larger employer perspective.

Ellen Verzino: From that lens, first you really need to understand: what are we trying to accomplish? What's the employer trying to accomplish? And I think probably more recently everyone is focused on: what's my strategy this year? And we really need to be thinking: what's the multi-year strategy? What are you trying to get to from a financial perspective, from a product perspective?

Ellen Verzino: And to do that, you have to have all the right folks pulled together—not just the benefits folks. It's: who are all the stakeholders? And not just getting them together, but understanding what everybody is looking for, and then taking that information and summarizing it to get everyone aligned with: what are you trying to accomplish?

Ellen Verzino: So that as we're putting together the RFP, we really understand what you're trying to get to. Data is key in terms of understanding where you are right now and where you're trying to get to. So making sure that you have your own data—have you evaluated your data? If you haven't, try to get that information.

Ellen Verzino: The other piece—which Margo touched on—is going forward, being vested as you make these decisions. It's going to look different. It's going to feel different. So making sure people understand.

Ellen Verzino: I will say: before I joined Lockton, I was mostly on the health plan side, and I recently ran a full PBM conversion to one of—not the big three—and went through the process. And again, it's a whole different mindset. People need to understand from a finance perspective: your admin fees are going to look very different than they have previously. So it's really educating folks on what it's going to look like when I have this transparent model, and that everyone understands why we went down that path.

Snezana Mahon: So let's talk a little bit about the transparent model and the elephant in the room, which is the PBM evaluation spreadsheet. Everyone asks about it, and not a lot of people really understand it.

Snezana Mahon: And so as we think about the evaluation, I can't tell you how many times: "Snezana—the spreadsheet. I want transparency, but yet somehow the transparent PBM always shows up fourth or fifth magically on the spreadsheet. And it's always the big three PBMs that are number one on the spreadsheet." Why?

Snezana Mahon: If you can talk more about the importance of going beyond the spreadsheet and evaluating transparency differently—because it will tell you a different story than just the spreadsheet.

Michael Lonergan: The way I think about it is: pharmacy has become more of a strategic investment. Twenty-plus years ago, it was 5% of your investment in health care, and it was managed sort of in aggregate—it was just this thing. Over the last twenty-plus years, it's become a much larger part of the investment and a lot more complex.

Michael Lonergan: So you really have to treat it as a strategic investment. You have to develop a value-based framework to work through that process to make sure that you get the right partner, the right model, the right contract constructs, and then you can actually measure and monitor it as if it's a strategic investment—and not just something you do once a year.

Michael Lonergan: I will say there is still an element of: you need a spreadsheet to compare commercial aspects of your agreement—things like discounts and rebates—and as much as we hate them, they still are part of the equation.

Michael Lonergan: Historically, a lot of the middle-market, up-and-coming PBMs struggled because their value prop was: we manage better. We don't spreadsheet as well, but we manage better. And we actually think the end result—from a financial perspective as well as an experience and outcomes perspective—is better. But it was always a struggle because the one metric was produced by the spreadsheet.

Michael Lonergan: One of the ways the market has evolved is those up-and-coming more transparent PBMs have started to put a little more skin in the game themselves by saying: "Look—how can I get you comfortable to take a chance and believe what we're telling you?" They've started to do things like PMPM backstops, working more creatively with stop-loss, and that's enabled people to take that next step and lean into what they previously thought was too risky.

Snezana Mahon: Speaking of that, maybe Regina and Ellen, you can comment on the control of the input points into the spreadsheet—control of biosimilar adoption, choice on specialty pharmacy, and the ability to change in-quarter.

Snezana Mahon: And how do you then hold them accountable—whether it's on a PMPM guarantee basis or discounts? Because what employers are really upset about right now is the clawbacks that are occurring on network rates, specialty rates, rebates that were promised in line 7B on a cell in an Excel spreadsheet that no longer is coming true. So we'd love to hear: how do you empower employers to fight and control some of those input and output points?

Regina Ihrke: I started as a pension actuary. I think we did stochastic pension forecasting like 25 years ago. We are now in stochastic forecasting for health care, right? And the data is stronger now than ever before, and the modeling is much more sophisticated.

Regina Ihrke: I think everything is still evolving on how you model. But if I think about who came in under their claims budget last year in this room—no one. Right? Like, no one. So you have to… one person—oh my gosh—I think that's Sue? Everyone, right?

Regina Ihrke: What's happening is everybody's like: what's driving the cost? Well, of course there's the first layer: high-cost claimants, pharmacy. If you cover GLP-1 a certain way, that's a piece of this. But the mix is changing, and what you're using is changing.

Regina Ihrke: So you do need a whole dynamic forecast of: who's in your demographics, what do they look like today, what are they going to look like in six months, what are they going to look like a year from now, and where could the possibilities of their risk in health care be on those mixes?

Regina Ihrke: Because the guarantees are based on some data that was given in an RFP over a year ago. And I'm seeing this right now: my mix is changing, and so we have to get really dynamic and adaptable to all these different models.

Regina Ihrke: So that's me geeking out a little bit on the data side of what's happening. You can talk on the contracting because that's when I get to go away.

Ellen Verzino: That's not everybody's favorite part—the contract. Through the RFP process, one thing is: whatever the questions are, making sure those are legal—they're going to end up in a contract. So everybody understands: as you're answering questions and the analysis is taking place, this is what you're going to be held to.

Ellen Verzino: The other thing we've touched on is understanding each vendor and what their strategy is. Related to biosimilars: do they have a biosimilar strategy? If they do, is it co-preferred, or is it the only strategy?

Ellen Verzino: Another advantage that folks like us can lend is we can see what's going on across the market. So we can look at each vendor and say: you have a biosimilar strategy, but you've got 10% conversion. We can take those things into account when we're doing the analysis to give it a fair apples-to-apples comparison.

Ellen Verzino: We're looking at what's happening in the market as we're doing reconciliations—what are we seeing—going back to those vendors to say: "Hey, this is what you said in the contract. We are not seeing that hold true in the first quarter. We need to go back and make some adjustments." So you can tie those things together.

Ellen Verzino: With the contract: exclusions matter, definitions matter. So as you're doing the analysis on the spreadsheet, take all those things into account as you look at the drug mix and utilization.

Michael Lonergan: On the contracting side too: in a perfect scenario, you've created all these standard requirements, everyone responds in context, now you've got the ability to do a standardized comparative analytic on the financials—at least you get it put into the contract.

Michael Lonergan: Everything stays as you head into the contract, as you had intended. And there's this thing called reservation of rights or a contract modification clause—and you have to be really careful because sometimes it just magically slips in that basically says: "Hey, if the wind stops blowing from the north, none of this matters." And that's a big…

Regina Ihrke: That's a stochastic forecast.

Michael Lonergan: Yes—that's a big "I gotcha." And with regard to contracts, we're experiencing a lot of that today. Granted, there is a lot of change, so you want to be reasonable and a good partner with your partners. But at the same time, you don't want it to be so loose that on day one all of the commitments that you thought you had basically are for naught.

Snezana Mahon: Totally love that. So to wrap us up, I would love each of you to provide 30 seconds' worth of your advice to people sitting in the room—what they should be doing in 2026 as they prepare for 2027. Margo.

Margo Quinlan: Start earlier. In all seriousness, what we're talking about here—in order to do a better job—you need to start earlier. Also, as benefits professionals, I think we have relied on our phenomenal consulting partners to help guide what we're doing.

Margo Quinlan: But since we are now becoming stronger fiduciaries, we have to take a more active role in ensuring that our contracting—the process they're using and all the steps—are in line with what you intend. And last but not least: get auditing rights in all of your contracts.

Snezana Mahon: Michael.

Michael Lonergan:: I would piggyback on that. Treat your investment in pharmacy like it's a long-term, critical business strategy. Plan today—start planning today—for 3, 5, even theoretically 10 years, and then be continuous about it.

Michael Lonergan:: It can't be an annual or every-three-year deal. It has to be continuous. The market's way too dynamic to do any form of set-it-and-forget-it and think it's going to be successful.

Snezana Mahon: Ellen.

Ellen Verzino: Tagging on to "start early": also understand the resources you have internally. If the contract is going to be the long sticking point, do you have the right resources internally that can dedicate the time when it's needed to get the contract (or whatever) over the finish line?

Ellen Verzino: That's key, because if that's not the case, you may have to back your time frame up to give two years—which seems like a very long time—but again, this is a big investment.

Ellen Verzino: The other advice would be communication and making sure that all employees understand the strategy—how it helps them—what the investment is—so that everyone buys in going forward.

Snezana Mahon: Regina?

Regina Ihrke: I'll start with the why. Five years ago, pharmacy was 25% of the total pie of medical spend. Right now it's 40%. And in five years, it will be over 50%—or even 60%—of your spend.

Regina Ihrke: So if you think about that in your strategy work and what you're prioritizing every year—and I know most employers can do maybe three things a year—pharmacy has to be one of those items every single year going forward.

Regina Ihrke: And you have to be really open to the innovation that's going to keep happening at such a rapid pace, that you can't really have a multi-year roadmap that says: I'm going to go check this this year, and this the next year. You have to be flexible and adaptable to how the market's going to change—to address amazing revolutionary drugs in the market that also come with a high price.

Snezana Mahon: Thank you all very much for your time today. Wonderful dialogue. And if you have any questions, you can find these awesome colleagues here. Thank you.