A pharmacy guarantee is only worth what you can prove against the claims.
Discount and rebate guarantees are measured by the party that owes them, against definitions it wrote. We review the contract for what it actually promises, test the promises against claim-level data, and turn what we find into money recovered or terms rewritten.
Five places a pharmacy contract leaks money.
The annual reconciliation a pharmacy manager sends you is its own arithmetic. These are the checks we run against it.
Pricing Guarantees
Discounts are promised in aggregate across brand, generic and specialty. We check whether each channel met its own guarantee, and whether a true-up was paid or quietly netted against something else. Channel-by-channel pricing is the core test of any PBM contract audit. Try our free pharmacy rebate value calculator to run the numbers for your own group.
Rebates Earned vs. Passed Through
A “100% pass-through” can still exclude administrative fees, specialty and channels routed through an affiliated rebate company. We compare what the contract defines as a rebate with what reached the plan. The rebate definition in the PBM contract decides how much of that money is yours.
Plan Design as Coded
Copays, deductibles, exclusions and eligibility have to be built correctly in the claims system. A plan design coded wrong charges the plan or the employee on every script until someone catches it. Plan design errors in the pharmacy claims system are among the easiest to fix once found.
Eligibility
Scripts filled for members who had already terminated are paid by the plan unless the eligibility feed and the reconciliation catch them. We test the dates, not just the totals. Terminated-member claims are a standard test in a pharmacy benefit audit, and one of the easiest to prevent going forward.
Fees
Dispensing fees, clinical program fees and per-claim charges add up outside the discount guarantee. We list every fee the contract allows and what was actually billed. Fees outside the guarantee can quietly offset a discount that looks strong on paper, so every PBM fee belongs in the audit.
The audit you can run is the one you negotiated before you signed.
Most contracts permit an audit. The terms around it decide whether the audit can find anything.
Who Audits
Some contracts limit you to auditors the pharmacy manager approves, or bar firms that also work on the rebate side. The right to choose an independent auditor belongs in the contract. Independent auditor selection is one of the most important PBM contract audit rights.
What They Can See
Claim-level data is the minimum. Rebate testing needs access to the manufacturer and aggregator agreements behind the rebate, which many contracts deny unless the right is written in. Without rebate contract access, a pharmacy rebate audit can confirm arithmetic but not whether the rebate definition was honored.
How Far Back
Lookback periods, audit frequency, who pays for the audit and how quickly findings must be corrected are all negotiable at the bid and almost never negotiable after it. Write the pharmacy audit rights into the request for proposal so every bidder prices them in.
A finding is only useful if it changes the next contract.
Recoveries matter. The larger value is usually in the terms that stop the same leak next year.
Recover
Missed guarantees and misadjudicated claims are presented to the pharmacy manager with the contract clause and the claim data behind each one. Each finding is tied to the contract language, which is what turns a pharmacy audit into money recovered for the plan rather than a disagreement.
Rewrite
Definitions that allowed the gap get tightened at renewal: what counts as a generic, what counts as a rebate, and which channels each guarantee covers. Tighter definitions in the renewed PBM contract are how one audit keeps paying off in the years after it.
Re-Bid
Where the contract cannot be fixed in place, we take it to market on a written specification, with the audit rights built in from the first draft. Building audit rights into the PBM request for proposal is far easier than negotiating them in later.
What employers ask about pharmacy audits.
Can a fully insured group audit its pharmacy benefit?
Generally not. In a fully insured plan the carrier holds the pharmacy contract and the risk. Audit rights become yours when the plan is self funded or level funded and the contract is in your name. Fully insured groups can still ask for pharmacy reporting.
Will an audit damage the relationship?
A well-run pharmacy manager expects one. A contract that makes an audit difficult to run is itself a finding worth knowing about before renewal. Regular pharmacy audits are a normal part of managing a PBM contract, and a professional PBM treats them that way.
Why does the employer carry this at all?
Plan sponsors are responsible for prudent oversight of plan vendors and must attest annually that their contracts do not block access to cost data. A reviewed contract is how that oversight is shown. The gag clause attestation is due to the federal agencies by December 31 each year.
Where the Rules Come From.
The laws and rules named on this page link to the statute or regulation they come from. This is general information, not legal or tax advice, and rules change, so check the current text.
ERISA (29 U.S.C. Chapter 18)
The federal law that sets reporting, disclosure and fiduciary rules for employer-sponsored benefit plans.
Pharmacy Claims Monitoring
Recurring review and annual reconciliation.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
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