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The Pharmacy Benefit Manager (PBM) Request for Proposal (RFP) process is intended to help organizations compare options carefully and make sound pharmacy benefit decisions.
For health plans, coalitions, unions, specialty pharmacies, employer groups, and procurement teams, referred to as requestors moving forward, that goal matters. PBM selection affects prescription drug spending, pharmacy access, specialty drug strategy, member experience, clinical support, reporting, and contract performance.
But the traditional design of a PBM RFP process can create advantages that are difficult for requestors to see clearly.
Incumbent PBMs already understand the plan, population, contract history, service expectations, and practical cost of switching. Large PBMs may also have greater financial flexibility and larger teams dedicated to proposals, pricing, legal review, implementation strategy, and negotiation.
None of this means the incumbent is the wrong choice. Incumbents often earn renewals by performing well, maintaining strong relationships, and reducing implementation disruption.
The problem is different: when the procurement process itself requires substantial time, repeated rounds, extensive customization, and revised commercial terms late in the evaluation, it may favor the organizations best equipped to endure the process rather than making the strongest available offering easiest to identify early.
For requestors and their advisors, that is worth reconsidering.
Why the PBM RFP Process Can Favor Incumbents
Every PBM procurement decision involves real tradeoffs. Changing vendors may create implementation work, member communication needs, pharmacy disruption concerns, file transfer requirements, benefit configuration changes, and new operating relationships.
The incumbent begins with one powerful advantage: familiarity.
A requestor already knows how the incumbent operates. The incumbent knows the requestor’s existing plan design and service history. Even when alternatives appear promising, changing PBMs can feel like introducing new risk.
Traditionally, PBM RFP process can add to that advantage.
A requestor may spend months assembling requirements, inviting proposals, reviewing narrative responses, normalizing pricing, evaluating finalists, conducting interviews, requesting revised bids, and negotiating terms. By the end, the effort required to change may feel larger than it did at the beginning.
Large incumbents may also be better positioned to support a long procurement cycle. They may have dedicated RFP writers, pricing analysts, clinical experts, legal reviewers, implementation specialists, and executive sponsors available to support multiple rounds of response and negotiation.
Smaller or more specialized PBMs may have compelling offerings, but fewer resources to dedicate to every lengthy opportunity. That does not make their offering weaker. It means participation can be more expensive relative to the opportunity.
A procurement process that is costly to enter and costly to evaluate may unintentionally reduce the range of options a requestor seriously considers.
Scale Affects More Than Service Capacity
Scale also affects the ability to participate in the buying process itself.
A PBM with a large proposal organization can respond to more opportunities, customize more materials, complete more pricing exercises, involve more executives, and remain engaged through repeated rounds of review. A smaller PBM may need to be more selective because each RFP absorbs a larger portion of its available resources.
On the requestor side, scale matters too. A large health plan, coalition, union, specialty pharmacy, employer group, or procurement organization may have consultants, benefits leaders, legal teams, procurement professionals, and financial analysts available to manage a complex PBM RFP process. Smaller requestors may need meaningful comparison just as much, but may not have the same ability to support months of custom procurement activity.
This creates two access problems:
- Smaller PBMs may have difficulty gaining visibility in resource-heavy procurement processes.
- Smaller requestors may have difficulty obtaining the breadth and depth of PBM evaluation available to larger organizations.
A more efficient procurement model should improve access on both sides. It should make strong-fit PBM offerings easier to discover and easier to evaluate before a requestor commits to a long, expensive custom process.
The Pricing Problem With Multi-Round RFPs
The PBM RFP process often includes multiple rounds of pricing discussion.
A PBM submits an initial proposal. Requestors or consultants narrow the field. Finalists may then be asked to improve pricing, revise guarantees, modify service terms, or respond to competitive pressure.
Negotiation is not inherently a problem. Complex contracts require discussion, adjustment, and careful review.
But multi-round RFP processes can create strategic pricing incentives for any vendor, not only PBMs. A vendor may reserve its strongest pricing for later rounds, expecting that price movement will be required to win. In another version of the same problem, a vendor may present an unusually aggressive early offer to remain competitive or eliminate alternatives, then seek improved terms after the field narrows.
This does not mean every vendor uses these tactics, or that negotiation is improper. It means the process can reward pricing strategies that make early comparison less reliable and extend the path to a commercially durable agreement.
In PBM procurement, where pricing, rebates, guarantees, specialty arrangements, networks, and service terms are already difficult to compare, staged negotiation adds another layer of complexity.
The requestor may not be comparing the best durable offerings at the beginning. The requestor may be comparing strategic starting positions.
That has consequences.
It extends the buying cycle. It requires additional analysis. It increases consultant, legal, executive, and procurement time. It may cause less-resourced PBMs to invest heavily without reaching the later rounds where commercial terms become most competitive.
Most importantly, it makes it harder for requestors to understand the market efficiently.
A better procurement starting point would encourage vendors to present strong, clear, commercially credible offerings upfront, so requestors can identify serious options earlier.
Why This Matters More in Today’s PBM Market
PBM procurement is receiving greater attention because requestors and plan fiduciaries are being asked to understand pharmacy benefit costs, compensation arrangements, service models, and contract terms more carefully.
The Federal Trade Commission reported in its 2024 interim PBM study that the six largest PBMs manage nearly 95 percent of prescriptions filled in the United States. That market concentration does not determine which PBM is right for a requestor, but it reinforces the importance of a procurement process that makes alternatives visible and comparable. Source: Federal Trade Commission interim PBM report.
More recently, the U.S. Department of Labor proposed PBM fee disclosure requirements intended to improve transparency into fees and compensation received by PBMs and affiliated brokerage or consulting providers serving certain employer-sponsored self-insured plans. Source: Department of Labor proposed PBM fee disclosure rule.
For requestors, greater scrutiny creates a practical question:
Does the current procurement workflow help decision makers compare credible alternatives efficiently, or does it require substantial resources before meaningful comparison is possible?
Transparency is important. But visibility into compensation, pricing, service arrangements, and performance terms is most valuable when requestors can evaluate it in an organized and comparable way.
A formal RFP process can create documentation. A modern procurement process should also create earlier clarity.
The Resource Burden Can Reduce Contract Value
Lengthy procurement is not only inconvenient. It costs money.
In the PBM RFP process, requestors may require input from benefits leaders, procurement managers, finance teams, legal counsel, consultants, clinical experts, operations leaders, and executives.
PBMs may require proposal writers, sales leaders, pricing analysts, clinical teams, network experts, account managers, implementation specialists, lawyers, compliance leaders, and executives.
That is expensive labor on both sides.
Every hour spent by highly compensated professionals on repeated drafting, reformatting, repricing, re-reviewing, and re-negotiating affects the economics of the eventual relationship. That effort may be necessary for genuinely complex terms. It is harder to justify when it is being used to recreate common information or support a negotiation structure that delays presentation of the strongest durable commercial offering.
Requestors should want their experts spending time on the decisions that require expertise:
- Is this PBM a good operational fit?
- Are the pricing definitions understandable?
- Are the rebate terms credible and comparable?
- Do the network and specialty models fit the covered population or business need?
- Are the guarantees meaningful?
- What implementation risk exists?
- What contract protections matter?
Requestors should not need to spend excessive time simply discovering what viable PBM offerings are available.
PfRs Change the Starting Point
Proposals for Requestors (PfRs) are a vendor initiated alternative procurement approach designed for situations where structured comparison and speed are more valuable than extensive customization.
A PfR is created by a vendor using standardized, industry-specific templates and made available to qualified requestors through a controlled online marketplace after access requirements are met. In the PBM category, a PfR can include pricing approach, rebate structure, network model, specialty pharmacy capabilities, mail service expectations, clinical programs, implementation timing, reporting, guarantees, and other offering details needed for early evaluation.
A PfR is not a preliminary sales pitch. It is not publicly visible. It is not tailored to a specific requestor.
It is an available PBM offering presented in a structured format for qualified marketplace participants to discover and compare.
This approach reduces the importance of several mechanisms that make the conventional PBM RFP process slower and more resource intensive.
Rather than requiring requestors to initiate a full solicitation before understanding available options, PfRs make structured offerings discoverable after access requirements are met.
Rather than requiring every PBM to rebuild common response materials for every opportunity, PfRs allow vendors to present defined offerings in a reusable, standardized format.
Rather than rewarding strategic opening positions that depend on repeated negotiation rounds, PfRs are designed to encourage clear, commercially credible, best-available terms upfront.
Negotiation, legal review, and custom follow-up may still be required for some contracts. PBM relationships are important, and requestors should evaluate them carefully.
But well-constructed PfRs should minimize the amount of negotiation required to identify a viable offering. By reducing repeated bidding rounds and limiting opportunities to revise terms after competing options have been eliminated, PfRs can help requestors compare stronger initial offers with greater speed and clarity.
The purpose is to reduce the time and cost between market visibility and serious commercial engagement.
Faster Buying Cycles Can Improve Competition
Speed is sometimes treated as if it conflicts with careful decision making.
It does not have to.
A faster buying cycle can improve the PBM procurement experience when it removes repetitive work rather than removing meaningful review.
When qualified requestors can discover structured PBM offerings earlier, more of the decision process can focus on actual fit. When PBMs can provide strong available offerings without funding months of customized proposal work, more specialized or smaller vendors may be able to participate meaningfully. When pricing is expected to be strong upfront, requestors have a clearer view of serious commercial options before investing in later-stage diligence.
This does not guarantee that a non-incumbent will win. Nor should it.
The incumbent may still have the best offering. Familiarity, performance history, operational stability, and transition risk remain valid considerations.
The goal is not to disadvantage incumbents.
The goal is to prevent process design from making alternatives unnecessarily difficult to discover, compare, or pursue.
The Right Process Should Reward the Best Available Offering
The PBM RFP process remains appropriate for arrangements that require deep customization, formal requestor-defined specifications, or extensive stakeholder review.
But it should not be the automatic starting point for every requestor trying to understand the PBM market.
A process built around long documents, repeated response cycles, manual comparison, and staged negotiation may reinforce incumbent advantage even when better-fit options exist.
PfRs create a different model.
They favor defined availability, structured comparison, strong upfront offers, controlled marketplace access, and a shorter path from discovery to decision.
For requestors, that means gaining clearer visibility into PBM choices before committing extensive resources to a custom process.
For PBMs, it means competing through the strength and clarity of an available offering, not only through the ability to fund a lengthy RFP campaign.
The best procurement process is not the one that creates the most work.
It is the one that helps qualified requestors identify the strongest available offering efficiently, confidently, and fairly.
Why can the PBM RFP process favor incumbents?
The PBM RFP process can favor incumbents because incumbents already know the requestor’s plan and operating history, while large organizations may have greater resources to support lengthy proposal, pricing, legal, and negotiation cycles. This does not mean the incumbent is the wrong choice, but it can make alternatives more expensive to evaluate.
Are incumbent PBMs always a problem?
No. An incumbent PBM may be the best option based on performance, cost, member experience, operational stability, or implementation risk. The concern is not incumbency itself. The concern is whether the procurement process makes credible alternatives unnecessarily difficult for requestors to discover and compare.
Why can multiple RFP pricing rounds be inefficient?
Multiple pricing rounds can create strategic pricing incentives for vendors. A vendor may reserve its strongest pricing for later rounds or submit unusually aggressive early terms and then seek improved terms after the field narrows. These incentives can extend timelines, increase labor costs, and make early-stage comparison more difficult for requestors and their advisors.
What are PfRs?
PfRs, or Proposals for Requestors, are vendor initiated procurement offerings made available to qualified requestors through a controlled online marketplace. They use standardized templates to provide comparable information about available products or services.
How can PfRs improve PBM procurement?
PfRs can improve PBM procurement by making structured offerings discoverable earlier, encouraging clear and commercially credible terms upfront, reducing repetitive proposal work, and shortening the path from market discovery to serious evaluation.
Do PfRs eliminate negotiation or legal review?
Not necessarily. Negotiation, legal review, and custom follow-up may still be required depending on the contract. Well-constructed PfRs are designed to minimize unnecessary early-stage negotiation and reduce the cost of identifying viable offerings.