The Real Cost of the “Easy Button” in Prescription Insurance
- Susheel Jain
- Feb 3
- 3 min read
By Susheel Jain, CEO of Exouza
💡 The Easy Button Effect
Health plan buyers are often encouraged to take the path of least resistance.
When it comes to prescription coverage, that usually means accepting the built-in Pharmacy Benefit Manager (PBM) bundled with their medical plan.
It feels like the easy choice, but is it the best one?
👩💼 The Buyer’s Dilemma
An HR manager I spoke with recently manages prescription coverage for 2,000 employees in a rural town in the Southeast, about 3,500 people in total when you include dependents.
He wasn’t looking for anything complicated, just a plan that worked and didn’t cost more every year. Yet even without major workforce changes, his annual PBM costs were rising more than 20 percent, year after year. Service was getting worse: higher copays, more denials, longer wait times.
“Our employees are paying more, waiting longer, and getting less,” he told me. “And I can’t even see where the money’s going.”
When he tried to explore alternatives, his medical carrier warned that switching PBMs would trigger a major increase in the cost of his medical plan. His benefits broker said they’d have to charge extra just to research other PBM options.
What was supposed to be a simple choice had become a system of built-in disincentives designed to keep employers locked in and the profits flowing.
📊 He’s Not Alone
94% of small business insurers report struggling to cover the cost of benefits and are seeking alternatives to the dominant PBMs.¹
Across the country, from North Carolina to Texas to local AMA chapters, employers are realizing the “easy button” comes with hidden costs.
As Duncan Greenberg and Jan-Felix Schneider wrote: “Smaller employers have always been at a disadvantage in buying health insurance. They have less leverage in negotiations, less in-house benefits expertise, and more volatile claims costs.”²
Opaque pricing, delayed rebates, and unpredictable formulary changes leave even experienced plan sponsors dependent on intermediaries to interpret their own data.
⚖️ Regulatory Pressure Builds
In January 2025, the Federal Trade Commission released interim findings on PBM practices, identifying $7.3 billion in excess costs from specialty generic markups between 2017 and 2022.³
The report pointed to systemic issues like spread pricing, exclusionary contracts, and misaligned incentives that have quietly inflated costs for years.
Now, several states are advancing PBM transparency bills requiring clearer disclosures on pricing and rebate flows. The message from regulators and buyers alike is clear: visibility is no longer optional.
🤖 A Different Model for a Different Moment
At Exouza, we built OpenPBM.ai to align with that new reality.Our AI-powered platform was designed to operate in real time, exposing its logic at the claim level and integrating seamlessly with existing systems.
It can function as a complete PBM or as modular components that improve visibility, pricing, and eligibility workflows within existing platforms.Most importantly, OpenPBM.ai does not rely on spread pricing or rebate maximization, the two practices most often criticized by regulators.
The PBM industry has been remarkably stable for decades, but that stability has come at the expense of innovation and buyer leverage. Today, that balance is shifting.
For employers like that HR manager, and thousands of others, a better alternative isn’t just overdue. It’s finally here.
If you are an employer/insurer,
📚 Sources
NC employers look to smaller PBMs “without shenanigans” — North Carolina Health News
On TPAs, PBMs, and SMBs — Duncan Greenberg & Jan-Felix Schneider
FTC Interim Staff Report on PBMs — January 2025