As health plans face rising drug costs and growing pressure to improve the member experience, some are considering a disaggregated approach to pharmacy benefits as the solution to addressing these challenges. They should consider the tradeoffs. Health plans need to understand why integration is still the most impactful option for their pharmacy benefits model.
Breaking pharmacy benefit services into separate parts often creates more complexity for both health plans and members. Multiple vendors can mean more contracts, more administrative work, and more disconnected data. That can make it harder to identify cost drivers, coordinate care, and provide a smooth member experience. Fragmentation can also weaken negotiating leverage and introduce compliance and oversight risks, especially when sensitive data is shared across disconnected systems.
Research shows integrated models deliver better results
Two studies published in the Journal of Managed Care & Specialty Pharmacy* examined the impact of integrating specialty benefits across regional health plans and self-insured Blue’s plans. The findings showed lower medical costs – 3.7% lower medical costs and $8.73 lower spend per member per month – and fewer hospitalizations.
A case in point: Blue Shield of California recently shifted to a modular pharmacy approach. In an article in Modern Healthcare, Blue Shield of California shared it has not yet met its savings target since making the change and why achieving sustained cost savings can be more complex than anticipated – from managing multiple vendors to negotiating direct deals.
Four ways integration makes a measurable impact
The following are four ways integration delivers measurable value across the areas that matter most — from cost containment to clinical outcomes, member experience, and operational efficiency.
1. Cost containment
With full visibility across the benefit, including retail drugs, specialty medications, discount programs, and clinical services, organizations can manage costs more strategically. Integration makes it easier to optimize formulary design, improve drug mix, maximize rebate value through scale and alignment, and measure performance over time. It also helps teams identify high-cost trends earlier and reduce avoidable medical costs through proactive clinical outreach.
2. Better Clinical Outcomes
When clinical programs are connected to claims, pharmacy, and member data, interventions can happen faster and with greater precision. Integrated models support earlier identification of at-risk members, smoother coordination across retail, mail, and specialty pharmacy, more personalized adherence and care management, and evidence-based utilization management. The result is better medication adherence, fewer hospitalizations, and stronger management of chronic conditions.
3. Improved Member Experience
A unified pharmacy experience can reduce confusion, frustration, and gaps in care. Integration gives members a more consistent experience, with a single point of contact for pharmacy needs, aligned messaging across channels, proactive outreach based on real-time behavior, and easier access to medications, including specialty therapies. These improvements can drive stronger engagement, fewer disruptions, and better health outcomes.
4. Operational Efficiency
Managing multiple vendors can create delays, extra handoffs, and unnecessary complexity. A connected PBM model helps streamline operations by reducing redundancies, simplifying coordination, and enabling faster decision-making. The result is lower administrative burden, greater agility, and a more seamless experience for both clients and members.
Better together: the power of integration
The case for integration is straightforward: when pharmacy, clinical programs, and member support work together, health plans can make better decisions, respond faster, and deliver a more consistent experience. For organizations weighing whether to carve out pharmacy benefits, the key question is not just whether disaggregation promises lower costs, but whether it can match the coordination, visibility, and simplicity that integrated models provide.
Learn more about the potential risks and disruptions associated with separating pharmacy benefit management (PBM) services and the value of an integrated pharmacy benefit model in this CVS Caremark Insights Report.
Footnote: The studies cited herein are independently published research and their inclusion does not imply endorsement by, or affiliation with, the publishing journals or their authors.
