Project Description

Problem: High Cost Pharmacy

During our analysis, we found that the employer’s plan was not receiving the best pricing options for pharmacy. The Pharmacy Benefit Manager  (PBM)  was keeping a significant “spread” – charging the plan more than the drugs cost the pharmacy. This is a common practice with insured plans. The formulary also included high rebate drugs that were no more effective then lower cost drugs. Rebates were 100% retained by the  PBM.  After taking over the program, we found four high cost drugs costing more than $5,000 per person per month.

The Stirling Solution

  • Changed PBM to a fully transparent, pass through program without “spread.”

  • The PBM is now paid on a per employee per month basis and all rebates go to the client.

  • Added drugs for chronic disease to a $0.00 copay list to encourage compliance and reduce costs.

  • Specialty medications were channeled to alternative PBMs where the cost was less than half the previous price. Members readily agreed to an alternative distribution in exchange for waiving the specialty drug copayment.

  • We customized the formulary for the client.

  • Added an independent pharmacy consultant review to advise on future formulary changes.


Reduced plan drug spend by 40%.
Lowered stop loss costs for the plan.
Overall plan costs decreased by 9%.