Enhancing Portfolio Value

PE Leadership is focused on increasing the overall value of portfolio companies, and one key strategy for achieving this is by reducing excessive pharmacy benefit costs. PBM contracts are often structured to favor the PBM’s financial interests over those of plan sponsors, leading to inflated drug prices and hidden fees. Through strategic PBM negotiations, PE leaders can secure more favorable contract terms that reduce costs while maintaining high-quality prescription benefits. Our services help identify financial inefficiencies within PBM agreements, ensuring that cost savings are achieved without compromising the employee experience. By optimizing PBM contracts, PE firms can improve the profitability of their investments and strengthen their competitive position in the market.

Standardizing Pharmacy Benefits Across Portfolio Companies

With multiple companies under management, standardizing pharmacy benefits administration across the portfolio helps streamline operations and drive efficiencies. By leveraging our expertise in PBM negotiations, PE leaders can ensure that all portfolio companies benefit from consistent, high-quality PBM services with greater financial transparency. Standardizing PBM contracts not only reduces administrative complexity but also increases purchasing power, allowing PE firms to negotiate better rebate pass-throughs, lower drug costs, and more favorable pricing structures. This cohesive, portfolio-wide approach leads to more efficient benefits management and greater financial control.

Mitigating Investment Risk through Compliance and Oversight

Regulatory compliance is a growing concern for PE firms managing pharmacy benefit contracts, particularly as state and federal legislation tightens oversight on PBM practices. PE firms must ensure that PBMs comply with evolving regulations that address spread pricing, rebate transparency, and fiduciary accountability. Our PBM negotiation process includes structuring agreements that require PBMs to disclose pricing methodologies, pass through legitimate savings, and adhere to all regulatory requirements. By embedding compliance safeguards into PBM contracts, PE leaders can protect their investments from unexpected legal liabilities, fines, and reputational risks.

Achieving Economies of Scale

PE firms managing multiple companies can unlock significant cost savings by consolidating PBM agreements across their portfolio. Many PBMs use opaque pricing structures that vary from company to company, leading to unnecessary expenses and inconsistent cost controls. By leveraging collective purchasing power, PE leadership can negotiate more competitive pricing, eliminate redundant administrative fees, and ensure greater rebate transparency. Our approach focuses on structuring PBM contracts that maximize economies of scale, ensuring that portfolio companies benefit from group purchasing efficiencies while maintaining high-value prescription benefits for employees.

Limiting Indemnification Obligations

PBM agreements often include indemnification clauses that shift financial and legal risks onto plan sponsors, leaving portfolio companies exposed to unforeseen liabilities. Given the growing regulatory scrutiny surrounding PBM practices, PE leaders must carefully structure indemnification terms to protect their investments. Our services focus on ensuring that PBMs assume responsibility for their own compliance, pricing accuracy, and service obligations, preventing portfolio companies from absorbing unnecessary financial or legal exposure. By negotiating fair and protective indemnification provisions, PE leadership can mitigate risk, preserve financial stability, and enhance the overall value of their investments.