Published April 15, 2025 | Updated November 11, 2026

Transparency is one of the most-used words in pharmacy benefits and one of the least consistently delivered. That gap leaves employers with a practical question at every PBM evaluation: what does a truly transparent PBM look like, and how can you verify it? I worked through that question with Breck Rice of ServRx on the PBM Reform Podcast, in a conversation that covered my roots in community pharmacy and the structural problems in the legacy PBM model.

If you care about fixing the incentives in pharmacy, supporting independent pharmacies, or just making sure patients aren’t overpaying for their prescriptions, I encourage you to give it a listen.

Listen to the full episode here.

In the meantime, here’s a deeper look at some of the themes that stood out from our conversation, and why they matter.

From Behind the Counter to Behind the Curtain

Before SmithRx, I was a pharmacist. I worked at Smith’s Food & Drug (ironically no relation to SmithRx) in Salt Lake City, which eventually became part of the Kroger family. It’s where I learned the real-world impact of pharmacy decisions on everyday people: neighbors who would walk in needing help, guidance, and often, some creativity in affording their medications.

I went on to get my PharmD and MBA from Idaho State, driven by a realization that clinical knowledge is only part of the equation. If we want to make the system better, we also have to understand the levers driving cost and access, many of which live deep inside the business of pharmacy.

That business side, I came to learn, was badly broken.

Seeing the Problem Up Close

When I joined a transparent PBM early in my career, I saw the potential. We built simple, pass-through contracts. Employers trusted us. But when we were acquired by a legacy PBM, everything changed.

Suddenly, our fair contracts were seen as margin opportunities. Instead of focusing on getting the best price for clients, the focus shifted to maximizing spread, pushing claims through higher-cost channels, and steering rebate flows. We were told to point to drug manufacturers when spend went up, but I knew our own pricing practices were a large part of the increase.

That moment was the turning point for me.

Rebuilding a PBM the Right Way

SmithRx was born from a desire to build a PBM that does what PBMs were originally designed to do: lower costs and improve access through efficiency and smart navigation, with economics our clients can see.

A truly transparent PBM lets the plan sponsor see how every prescription dollar moves, from what the pharmacy is paid to how the PBM itself is compensated. For SmithRx, that means:

• Every employer gets the same pharmacy pricing, with no hidden tiers or side arrangements.

• Every manufacturer rebate, administrative fee, and incentive goes back to the client.

• We are paid through a fixed per-member, per-month (PMPM) administrative fee, so our compensation does not increase when drug costs rise.

• Employers get access to all their data, from raw NCPDP claims to real-time rebate reports.

That structure makes transparency operational, because employers can check pricing, rebates, and our fee against their own claims data. We don’t just use the word “transparent”. We make it operational.

Technology That Finds the Savings

One of the things we’re most proud of is our Drug Pathways Engine, our internal platform that identifies savings opportunities across every prescription. Whether it’s a lower-cost therapeutic alternative, a more affordable pharmacy, or a patient affordability program, our system flags it. And our patient navigation team helps make the switch happen.

The goal is real, measurable savings for the plan and informed choices for members.

A Better Way to Partner with Pharmacies

Pharmacies, especially independents, are too often treated as cost centers rather than care partners. We take a different approach.

Instead of leasing our network from legacy PBMs, we built our own. That allows us to contract directly with community pharmacies and offer fair, predictable reimbursement. In fact, in some rural towns, we’ve worked with employers to offer slightly higher reimbursements to keep local pharmacies open. And those employers were more than willing to do it because they understand the value.

Too many pharmacies are closing. If we don’t change how PBMs treat these providers, more will follow.

A Call for Grassroots Reform

PBM reform has moved from talk in Washington to law. The Consolidated Appropriations Act, 2026 tightened ERISA’s fee disclosure rules as of February 3, 2026, and the Department of Labor’s PBM fee disclosure final rule requires PBMs to disclose rebates, spread compensation, pharmacy clawbacks, and other compensation to fiduciaries of large self-insured plans, with annual audit rights, for plan years beginning on or after July 1, 2027.

I’m glad it’s happening, but lasting change will come when employers use that information to demand better and modern PBMs step up to deliver it. Many employers are already moving in that direction: 32% of employers surveyed for Business Group on Health’s 2027 Employer Healthcare Strategy Survey expect to have a transparent or next-generation PBM model in place by 2027, and 47% are considering one for 2028 or 2029.

That’s why conversations like the one I had on the PBM Reform Podcast matter. When we talk openly about incentives, pricing practices, and how money moves behind the curtain, we give employers, pharmacists, and patients the tools they need to advocate for something better.

If you’re an employer, consultant, pharmacy, or plan sponsor looking for a better way, let’s talk. If you’re a pharmacy that doesn’t feel fairly treated by SmithRx, we want to hear from you. Our model only works if it works for everyone.

Let’s rebuild this thing the right way.

Frequently Asked Questions

What is the difference between a pass-through PBM and a fully transparent PBM?

Pass-through describes a model feature, where certain rebates and discounts flow back to the plan, while full transparency also covers how the PBM is paid, which revenue passes through, whether ownership ties affect decisions, and what data the employer can access. A PBM can offer pass-through pricing on some revenue streams and still limit visibility into others, so employers should verify each one in the contract.

Is switching to a transparent PBM enough to lower drug costs?

Transparent pricing shows an employer what the plan pays, and lowering that spend depends on how well the PBM executes clinically, from utilization management to moving members to clinically appropriate lowest-net-cost options. Employers should evaluate a PBM’s clinical execution and plan outcomes alongside its contract terms.

What compensation should PBMs disclose?

Employers should ask for disclosure of manufacturer rebates and fees, spread compensation, pharmacy clawbacks and recoupments, price protection payments, formulary placement incentives, and the PBM’s own fees. 2026 federal PBM reform requires PBMs to disclose their compensation to employer plans, and the Department of Labor’s final rule adds detailed disclosure duties for large self-insured plans.