By: Kevin Kobielski, President of Navion
Pharmacy benefit managers often offer appealing guarantees—rebates, discounts, and price protections among some of them. But without verification, those guarantees are taken on trust within a system that typically lacks third-party oversight. That’s why more employers are viewing PBM audits not as optional, but as a key part of successful plan management.
The Dollars Are Too Big to Ignore
In a typical year, an employer-sponsored plan might spend millions on pharmacy benefits. And yet many of those same plans never formally audit whether they actually received the rebates or savings guaranteed in the contract.
The result? Dollars quietly slip through the cracks. In some cases, a lot of them. Audits don’t just uncover mistakes—they often reveal:
- Rebate underpayments
- Missed performance guarantees
- Errors in how drugs are categorized or calculated
- Contract terms that are open to interpretation
We supported a client in recovering $200,000 in missed rebate payments through an audit. In another case, a TPA partner uncovered over $1 million in unclaimed rebate guarantees. These aren’t minor oversights—they highlight how complex contracts and reconciliation processes can lead to missed opportunities if not routinely and independently reviewed.
Why Independent Audits Matter
Independent audits can provide a more objective perspective, especially when it comes to interpreting nuanced contract language, rebate eligibility, or specialty drug classifications.
Given the complexity of PBM pricing models—and the potential for varying definitions and exclusions—even small differences in interpretation can lead to meaningful financial impacts. A fresh set of expert eyes can help ensure you’re seeing the full picture and asking the right questions.
A strong independent pharmacy audit should focus on:
- Rebate payments vs. guarantees
- Claims adjudication accuracy
- Performance against contractual discounts
- Specialty classification discrepancies
It’s not just about catching errors—it’s about understanding the actual value you received compared to what was promised.
Make It Routine, Not Reactive
The most effective audits happen annually and are built into the contract from the start. That means:
- Audit rights are clearly defined
- Data access is guaranteed and timely
- Dispute resolution mechanisms are in place
- Market checks are allowed to compare current pricing to the broader landscape
So, if your contract begins on January 1, request a report from your PBM by March or April. With that data, a reconciliation partner can typically deliver results by August—giving you a clear view of performance well before renewal discussions begin.
When employers build this into their agreements up front, the conversation shifts from “can we audit?” to “what did we find?”
What You Don’t Know Will Cost You
In today’s market, an unaudited PBM contract is a missed opportunity. Not because the PBM is necessarily doing something wrong—but because the only way to know for sure is to check. And when you do, the findings often pay for the process—and then some.
