Benchmarking Your Rx Spend: Are You Overpaying and Don’t Know It?

Prescription drug costs are out of control, sure, but the real frustration for most employers isn’t just the rapidly rising price tag. It’s the black hole of visibility. When you’re constantly operating without clear benchmarks or transparent pricing, how can you possibly know if you’re getting ripped off on your pharmacy benefits?

Spoiler: Most employers are. 

The Hidden Cost of Not Knowing

Think of your traditional Pharmacy Benefit Manager (PBM) as a black box. They give you reports that look great, touting big price reductions, but they keep the real numbers hidden: the actual cost of the drugs, the rebates they get, and the rates they pay pharmacies. Here’s the catch: They never show you the original price those “reductions” are based on. Without that baseline benchmark, those numbers are meaningless. When you, the one paying the bill, have no idea what the real cost is, overpaying isn’t just a risk; it’s practically guaranteed.

What Benchmarking Should Look Like

What does benchmarking your prescription drug spend actually mean? You take your current costs and contract rules and stack them up against three key things:

• What everyone else is paying: The true, competitive price for the exact same drugs.
• The standard metric: Industry averages for how much companies spend on drugs per employee, per year (PEPY).
• The honest approach: Transparent models (like SHARx) that reveal the actual cost to acquire the drugs.

You also need to look at how your plan measures up to other employers of a similar size in your industry or region.

Questions to Ask 

• Is my cost per prescription reasonable compared to the national benchmark?
• What am I paying for high-cost specialty drugs compared to acquisition cost?
• How much of my budget is being spent on drugs simply because they maximize the PBM’s rebates, not because they’re the best value for my plan?
• When was the last time I audited my PBM?  

If you are unable to answer these questions confidently, it is time to dig deeper.

Time to Stop the Hidden Overpayments

At SHARx, we partner with self-funded employers to pull back the curtain on prescription spending. We go beyond standard reports to provide transparent, real-world benchmarking. The eye-opening part: Most of the time, employers are overpaying by as much as $1,500 per employee, per year, all because they’ve never seen a true cost benchmark.

Our cost reduction analysis quickly reveals three key things:

• Exactly which drugs you’re buying at inflated prices.
• Where your current drug list (formulary) is unnecessarily driving up costs.
• How much cash you can put back in your pocket by switching to a direct, fully transparent sourcing model.

Why Benchmarking Is More Than a Finance Exercise

It’s not just about cost. Benchmarking your Rx spend is a strategic tool for: 

• Supporting fiduciary responsibility under ERISA
• Identifying reinvestment opportunities for your workforce
• Designing smarter, more equitable benefits plans
• Strengthening your position as a competitive employer

Final Thoughts  

If you don’t know what you’re spending—or how that compares to the market—you can’t improve it. Prescription drug costs are too significant to leave unexamined.

Not sure how your pharmacy spend stacks up? Let SHARx benchmark it for you. Our no-cost analysis helps you understand where you stand, and what you could gain by switching to a more transparent, employee-focused model.