“In a Blue Cross and Blue Shield of Texas proposal for the CITY OF GALVESTON‘s 2025 health plan, under “Commissions,” Gallagher was listed to receive $2.25 for EACH net paid pharmacy claim…….Now look at Austin Independent School District ……………”
By David Contorno
Gallagher: WHY WOULD YOUR FIRM GET PAID MORE WHEN EMPLOYEES FILL MORE PRESCRIPTIONS? Not when drug prices fall. Not when patients get healthier. PER PRESCRIPTION CLAIM. I found the receipts.
In a Blue Cross and Blue Shield of Texas proposal for the CITY OF GALVESTON‘s 2025 health plan, under “Commissions,” Gallagher was listed to receive $2.25 for EACH net paid pharmacy claim. The proposed PBM? Prime Therapeutics. That’s a proposal—not proof the arrangement was implemented. But the payment formula is right there.
Now look at Austin Independent School District 2019 PBM procurement. One bidder noticed the RFP prohibited commissions while another provision required the winning PBM/carrier to pay Gallagher Pharmacy Practice $1.75 PER PRESCRIPTION. The district confirmed the fee was ALREADY IN FORCE and instructed bidders to include it in their pricing.
But wait, there’s more. A 2024–2026 CVS Caremark–Gallagher agreement excerpt presented to CONGRESS provides for “Additional Credits” remitted to Gallagher ON BEHALF OF participating employers: $2.50 per 30-day retail claim. $7 for certain mail, specialty and 90-day claims. Those are described as employer “group credits”. The excerpt does NOT show how much Gallagher ultimately kept versus passed through. SO SHOW US THE ACCOUNTING.
Here’s the question nobody seems eager to answer: Why should the financial relationship between the organization advising an employer and the companies administering its pharmacy benefit depend on how many prescriptions get processed? Necessary medications save lives. Better adherence can increase prescriptions AND improve health. But a per claim payment alone doesn’t reward the lowest NET drug cost or better clinical outcomes.
I know how easily industry compensation gets rationalized. I once promoted my carrier relationships as proof of my independence and value. I didn’t fully understand their influence until I changed how I was paid.
Gallagher: Explain which fees you actually received, which credits employers received, and how these arrangements improved their total drug spending.
To every broker: What other PBM paid compensation are employers not asking enough questions about?
A DISCLOSED CONFLICT IS STILL A CONFLICT. Employers shouldn’t just demand DISCLOSURE. DEMAND COMPENSATION ALIGNMENT.