UC Health is apparently considering creating its own Pharmacy Benefit Manager, rather than use outside firms. From Item H6 at the Health Services Committee of the Regents (July 15) which reviews rising drug costs:
Opportunity: A Pharmacy-Led PBM Strategy for Self-Funded Plans
Pharmacy Benefit Managers (PBMs) act as intermediaries between drug manufacturers, payers, and pharmacies. While originally designed to streamline access and control costs, many PBMs today operate with limited transparency, retaining rebates and generating profits through spread pricing, a practice in which a pharmacy benefit manager (PBM) charges a health plan more for a drug than it reimburses the pharmacy, keeping the difference as profit. In response, UC Health may consider new opportunities itself in pharmacy benefit management, focusing first on the administration of pharmacy benefits for its self-funded employee health plan. A UC PBM strategy would allow the University to move away from third-party PBMs that often operate with opaque pricing structures, limited alignment to clinical value, and retention of rebate dollars that could otherwise be reinvested in care. A UC pharmacy-led PBM model offers the prospect of better transparency with upfront drug pricing (cost plus model), negotiation and retention of drug manufacturer rebates, with the value passed directly back to UC’s self-funded health plan and members.
Ultimately, internalizing this function could empower the system to reinvest savings into patient care, benefit design, and high-impact therapeutic access. UC Health’s pharmacy teams already manage complex drug regimens, high-cost specialty therapies, and population-level utilization strategies, making this an operationally feasible and mission-consistent next step. A UC-led PBM could represent not just a milestone in operational efficiency, but a model for how academic health systems can deliver equitable, transparent, and patient-centered benefit strategies at scale. UC Health will continue to confer with the University’s health plan leadership and UC Health sites to determine the viability and future for such an offering.
Source: https://regents.universityofcalifornia.edu/regmeet/july25/h6.pdf. (p. 7)
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