Every PBM calls itself transparent now. CVS Caremark says it passes back 95% of negotiated rebates to plans. Sounds good until you read what an OPM OIG audit actually found.
Buchanan Ingersoll & Rooney PC, analyzing that audit, documented that CVS Caremark didn't pass through negotiated discounts with two of the largest retail pharmacy chains. The result: a $478 million overcharge to federal plan members. That's not a footnote. That's a number that should change how you read every PBM contract.
The word "transparent" doesn't mean anything without contract language behind it. Your job is knowing the difference between a PBM that markets transparency and one that contractually guarantees it.
The DOL's proposed rule published in January 2026 sharpened the definition further. Pass-through means the plan pays exactly what the pharmacy gets reimbursed, with all compensation plainly identified. Spread pricing is the opposite. The PBM pockets the difference between what it charges you and what it pays the pharmacy. Those two models can look identical in a sales presentation.
The Consolidated Appropriations Act of 2026, signed into law on February 3, 2026, codified this standard. PBMs serving ERISA-covered group health plans are now classified as "covered service providers" under ERISA Section 408(b)(2). That means 100% rebate pass-through is required, all direct and indirect compensation must be disclosed, and compensation must be "reasonable" to qualify for the statutory exemption. Plans renewing contracts after August 3, 2028 must comply.
Who's Actually Doing It?
The Big Three still process roughly 80% of all prescription claims in the U.S. But the cracks are widening. A Healthcare Brew survey found that 52% of employers are considering changing their PBM in the next one to three years. That's not a soft signal. That's half the market looking for the exit.
Here's who's earning that business.
Capital Rx (Now Judi Health)
Capital Rx raised $400 million in September 2025 and rebranded as Judi Health. Total funding: $607 million. Valuation: $3.25 billion, more than double its March 2024 figure. As of January 2026, the platform has surpassed five million contracted employer PBM lives, with 54 million health plan lives running on the Judi platform. They signed 80+ new partnerships in both 2024 and 2025, including 13 Fortune 500 corporations and 21 hospital systems. Flat admin fee. 100% rebate pass-through. Full audit access.
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SmithRx
SmithRx has raised $110 million in total funding, serves over 5,000 employer clients, and delivered $320 million in savings in 2025 alone, reducing client pharmacy costs by an average of 20%. They earned URAC accreditation in March 2026. Their platform automates cost-savings at the point of adjudication, identifying the lowest-cost drug option for every fill. Transparent fee structure. No spread pricing.
Navitus Health Solutions
Navitus, owned by SSM Health and Costco Wholesale, serves over 18 million members across 800+ clients. They pioneered the 100% rebate pass-through model and now offer cost-plus pricing through Costco pharmacies as of January 2026. They also launched Navitus Key in 2025, a streamlined PBM solution built specifically for employers with fewer than 5,000 members. No spread. No retained rebates.
Rightway
Rightway combines PBM services with clinician-led care navigation. With $239 million in total funding and a $1.1 billion valuation, they've grown PBM volume by over 100% each of the last three years. They now work with 30+ Fortune 500 companies and ranked #42 on the 2025 Deloitte Technology Fast 500. In January 2026, they launched SureSpend, a pricing model with a single predictable monthly cost and unlimited liability. Rightway refunds 100% of overages dollar-for-dollar with no cap. Their Zero-Markup Wrap covers drug classes that other PBMs typically exclude, including GLP-1s and rare high-cost medications, at true net cost with 100% rebate pass-through. In April 2026, ParetoHealth made Rightway available to its community of 4,000+ employers, covering approximately 1.3 million people.
Mark Cuban Cost Plus Drugs
Mark Cuban Cost Plus Drug Company built its reputation on radical price transparency: manufacturer cost plus a flat 15% markup, a dispensing fee, and shipping. No rebate games. No spread. In April 2026, they partnered with Humana's CenterWell to route group-plan members through Cost Plus pricing. For employers shopping Humana group plans in 2026 and 2027, it's a new lever to reduce prescription costs without shifting expenses onto employees through higher copays or thinner formularies. Employers can also bolt on Cost Plus Drugs to their existing PBM network or use their claims processor directly.
FairosRx
FairosRx, founded by Alex Fairly of Fairly Group, runs a true pass-through model with a concise 10-page contract. They pass through 100% of negotiated rebates and provide real-time claims data with user-friendly reporting. Their pitch: $1.2 million in savings per 500 employees, or 20-30% on average, without compromising quality of care. FairosRx is focused on self-funded employer groups and works through brokers and consultants. They're included in the 2025 Access Market Intelligence PBM report alongside the other leading transparent PBMs.
RxBenefits (Illuminate Rx)
RxBenefits operates as a pharmacy benefits optimizer. Their marketplace model lets self-funded employers compare competing offers from multiple PBMs simultaneously. In 2025, they launched Illuminate Rx, a transparent PBM with real-time data clarity and biosimilar-first strategies, built specifically for employers struggling with specialty drug and GLP-1 spending. Their clinical management program delivers more than a 20% reduction in per-member-per-month net cost.
What Did the FTC Find About the Big Three?
The FTC's second interim staff report (January 2025) detailed how the six largest PBMs process nearly 95% of all U.S. prescriptions. Vertical integration gives them ownership of the pharmacies, the mail-order operations, the specialty dispensing, and the health plans they're supposed to negotiate against.
The Big Three's affiliated group purchasing organizations have extracted billions in additional fees from drug manufacturers. Those fees doubled from $3.8 billion in 2018 to $7.6 billion in 2022, according to the FTC.
In February 2026, the FTC secured a landmark settlement with Express Scripts. The agreement requires fundamental business practice changes around transparency and is expected to drive down patients' out-of-pocket costs for drugs like insulin by up to $7 billion over the next decade. The FTC has also filed suit against all three major PBMs for anticompetitive rebating practices that artificially inflated insulin list prices.
What Contract Clauses Separate Real Transparency From Marketing?
When you're reviewing a PBM contract, these are the five places where transparency lives or dies.
Rebate pass-through guarantee. The contract must state 100% of manufacturer rebates flow to the plan. "Net of fees" or "contractually retained portion" are red flags. The CAA 2026 now requires this by law for contracts renewed after August 2028.
Spread pricing prohibition. The contract should explicitly state the PBM charges the plan exactly what it reimburses the pharmacy. No spread. No retained differential. No exceptions.
Audit rights. You need unrestricted audit access with reasonable notice, covering pharmacy reimbursement data, rebate receipts, and administrative fees. The CAA 2026 mandates that PBMs make rebate arrangement records available for plan audit.
Data ownership. Your claims data belongs to you. The contract should say so explicitly. You need the right to pull it, share it with your advisor, and use it for benchmarking. Track this in your Benefits Control System.
Fee structure disclosure. All revenue streams, including admin fees, clinical fees, data fees, and any other compensation, must be itemized. Under ERISA 408(b)(2), PBMs must now disclose all direct and indirect compensation. The arrangement must be "reasonable" to qualify for the statutory exemption.
A Pharmaceutical Strategies Group survey found that only 59% of employers reported receiving 100% of rebates for traditional drugs and 57% for specialty drugs. Roughly four in ten employers think they're getting full pass-through. They aren't. The contract is where that gap starts.
How Much Can a Transparent PBM Actually Save?
SmithRx clients saved an average of 20% on pharmacy costs in 2025. RxBenefits' clinical management program delivers more than a 20% PMPM reduction. For a 200-employee company spending about $950,000 annually on pharmacy benefits, 20% is $190,000 back in the plan.
Milliman found that employer-sponsored plans using rebates reduced premiums by just 9% in 2025. The gap between what rebates save on paper and what actually reaches the plan is where PBM profit hides. A transparent contract closes that gap.
Specialty drugs now account for more than 55% of the typical plan's annual pharmacy spending while being used by about 2% of members. That concentration means PBM formulary decisions on a handful of high-cost drugs drive more of your total spend than every generic combined. Independent clinical management, not influenced by PBM dispensing and rebate revenue, is the only way to keep those decisions aligned with your plan's interest.
What Should You Do Before Your Next PBM Renewal?
Start with the four-part test: flat admin fees, 100% rebate pass-through, open audit rights, and full data ownership. Read the actual contract language, not the sales deck.
The CAA 2026 gives you new leverage. PBMs are now covered service providers under ERISA. They must disclose all compensation. They must pass through all rebates. Plans renewing after August 2028 must comply, but there's nothing stopping you from demanding these terms now. Use our Compliance Calendar to track the effective dates.
Map your current PBM arrangement against the transparent alternatives. Compare your carve-out vs. carve-in structure. Benchmark your rebate retention and spread. Build this into your 5-Year Benefits Blueprint so the PBM contract isn't something you revisit every three years in a panic. Make it part of a strategy.
Don't evaluate a PBM on their pitch deck. Evaluate them on the contract. The market has shifted. The law has changed. The alternatives are proven. The only question is whether you're still paying for opacity you don't have to accept.
