Specialty Drug Cost-Containment Vendors Earn Sharper Scrutiny As PBM Transparency Matures

PBM transparency has become a defining theme of the self-insured market. Federal regulations, employer pressure, broker scrutiny, and competitive positioning from smaller PBMs have all pushed the category toward greater disclosure, but the momentum has not reached every corner of the ecosystem. A growing class of vendors operates inside self-funded plans with proprietary methods, opaque algorithms, and limited visibility for the members who eventually rely on their decisions to access specialty therapies. The result is a double standard that benefits leaders cannot afford to leave in place, because the same fiduciary questions being asked of PBMs apply to every vendor that influences how care is delivered.

Edward Sotherden spent much of his career building programs to shift risk away from payers and onto manufacturers. Now, as SVP of Alternate Access Solutions at Phluence, he helps pharmaceutical manufacturers counter those programs, advising on how initiatives like alternate funding programs, specialty carve-outs, and other vendors affect product access. That cross-functional vantage point shapes Sotherden's view that the industry’s transparency standard should apply evenly across every vendor that touches a self-insured plan.

"Employers should have a very clear understanding of how their members' benefits are going to be administered, and the members themselves should have that clear understanding up front," he says. It sounds straightforward, but so far, the practice has fallen apart when applied across the full vendor stack.

The double standard inside self-funded plans

The transparency conversation has fixated on PBMs for understandable reasons. They sit at the center of pharmacy spend and have been the focus of federal action. The largest players have responded with new transparent products, while smaller competitors have built their entire positioning around openness. The class of vendors Sotherden is most concerned about, specialty drug cost-containment players, has not faced the same pressure. "There's a universal call for transparency, and PBMs have been the largest target," he says. "But there are numerous vendors entering a self-insured plan sponsor's ecosystem to help them save money on specialty drug spend, and that class is extremely opaque in how they operate and how much visibility patients get."

The opacity is not incidental to how those models work. In several cases, Sotherden asserts, it's structural. "Those types of vendors are incentivized to make it seem like they're helping the member navigate the process of obtaining specialty drugs, versus what they are actually accomplishing, which is moving that risk away from the plan sponsor and to pharma or some foundation." If the model were fully transparent at the point of plan enrollment, he says, members would understand that the value of their benefits package has changed compared to the prior year, and prospective employees would weigh job offers differently. Vendors with an interest in obscuring that comparison have an incentive to keep the picture incomplete.

What members and employers actually need to see

The information gap shows up on both sides of the plan. Members typically encounter the mechanics of a cost-containment vendor only when they need a specialty drug, which is the worst possible moment to learn how the model works. Employers, meanwhile, often underestimate the operational disruption a new vendor will introduce. "The vendors that add a layer of complexity and create friction with the member are incentivized to really downplay that. They don't want the employers fully understanding the level of disruption that could happen implementing these types of solutions," Sotherden explains.

For employers and brokers considering vendors in this category, he advises starting with the proprietary methods and algorithms that decide how member benefits are administered. He believes plan sponsors making decisions on member access should have a clear view into those mechanics before signing the contract, not after a member calls to ask why their therapy is being routed through a foundation, a manufacturer assistance program, or an international supply channel.

Fiduciary duty extends beyond PBMs

The transparency question connects directly to a fiduciary one. Plan sponsors have an obligation that extends beyond cost reduction, and Sotherden frames the same duty that brokers increasingly apply to PBMs as the right lens for the full vendor stack. "The fiduciary responsibility is more than just saving the plan money. There are a lot of components to it. That same fiduciary responsibility applies to any of the vendors you're handing over decision-making ability to in the ecosystem." In other words, any vendor influencing how a member gets care may be exercising decision-making authority that the plan sponsor ultimately remains accountable for.

For a benefits manager or CFO looking to audit their current arrangement, Sotherden's first move is to focus on incentives. "You show me the incentives, and I'll show you the outcome," he says, citing a popular adage attributed to longtime Bershire Hathaway Vice Chairman Charlie Munger. "The first thing I would want to do is have a truly independent fee-for-service consultant that understands the entire ecosystem look at the incentives and alignment, and then go from there."

The market is shifting, and so should the scrutiny

The current moment has unusual characteristics that make this work timely. GLP-1 direct-to-consumer programs have shown how quickly the market can find new equilibrium when stakeholders align on access. Specialty drug pipelines continue to produce expensive rare disease therapies that demand creative cost-management approaches. Cost-containment vendors will continue to proliferate, and so will the variation in how transparent and how disruptive they are. "We have hit an inflection point where for the first time in a long time, a lot of stakeholders on both the buying and selling side are aligned that cost is an issue and access is an issue," Sotherden notes. "Anywhere there's fogginess or opaqueness, there are going to be vendors that take advantage of that and find ways to make money in that absence of clarity."

Sotherden's argument is not that the vendor category should be dismantled. He acknowledges that transparent, lowest-net-cost vendors exist within it, and they create real opportunities for plan sponsors, pharma manufacturers launching biosimilars, and patients who need specialty therapies. His broader point is that the benefits community cannot demand transparency from one part of the stack while accepting opacity from another. The same disclosure standard, applied consistently, lets employers and brokers separate the vendors solving real problems from those simply redistributing risk. "It's not that all vendors are bad," he says. "It's 'How can we help pharma understand these vendors?'"