This is an AArete Healthcare Payer insight

The Challenge

A large regional commercial health plan with over 1.5 million lives and more than $3 billion in PBM spend had transitioned to one of the industry’s leading PBMs but was not realizing the value they had anticipated. Despite managing clinical policies and prior authorization processes in-house, the organization lacked the transparency, cost control, and operational flexibility required to effectively meet the evolving needs of their diverse client base.

Now in year two of a three-year PBM contract, the organization sought a bold new strategy—moving to a modular, unbundled operating model that would allow for greater visibility, improved outcomes, and a long-term path toward sustainable value.

Our Approach

AArete engaged with pharmacy and other senior leadership through a focused 12-week initiative to accelerate the organization’s PBM strategy. By leading structured working sessions and gathering stakeholder input, AArete helped shape a phased 3- to 5-year roadmap to unbundle the PBM operating model.

The collaboration included:

• Executive alignment around a future-state vision
  
• Market insights and analysis of insourcing vs. outsourcing key PBM functions
  
• Evaluation of solution providers and technology partners

AArete offered critical advertisement around structuring new partnerships and enabling modular architecture to support long-term innovation and sustainable growth.

The Results

AArete delivered a comprehensive framework to execute the health plan’s PBM redesign. Through this collaboration, the health plan now has refined RFPs for a pharmacy benefit administrator (PBA) as well as other vendor partners. AArete also supported the health plan in developing key contractual language. We produced board-ready presentations and executive materials to create stakeholder alignment, secure project funding, and enable informed decision-making at every level.

By redefining their PBM strategy, the organization is now better positioned to deliver value-driven pharmacy benefits, support client needs, and lead with flexibility.

Opportunities Ahead

Unbundling presents a significant opportunity to rethink legacy vendor relationships and replace opaque, one-size-fits-all solutions with tailored partnerships that align more directly with the organization’s care, cost, and transparency goals. By standing up a pharmacy benefit administrator (PBA) at the center of the model, the health plan can maintain control over formulary design, rebates, specialty pharmacy, and data reporting—functions historically embedded within traditional PBM contracts.

AArete supports health plans in their disintermediation journey to develop strategies that reflect each organization’s unique needs. The momentum generated through this early-phase work creates a strong foundation for long-term success—one that balances administrative feasibility with strategic innovation in pharmacy benefit design.

Learn more about AArete’s Pharmacy solutions