Why Big PBMs Can’t Offer Transparency at Scale
You can’t retrofit transparency into a PBM business model built on secrecy and opacity.
Trying to retrofit transparency into a legacy PBM is like bolting windows onto a submarine—at best, you get a brief view; at worst, you sink the vessel.
Transparency sounds simple, but it is operationally incompatible with business models built on opacity. Everyone wants the credit for being “open,” yet few can afford what openness really costs.
The Transparency Paradox
Large PBMs—and several mid-market ones—publicly praise transparency while their financials depend on keeping it partial. The contradiction is structural: these entities are publicly traded, with earnings expectations tied to rebate retention, spread pricing, and network differentials.
According to industry filings, retained rebates (including PBM GPO and data access fees) and spreads represent 25–40% of gross margins for the top three PBMs (GAO, 2024; SEC, 2023). Those margins are not side effects; they are the business model. Full transparency would flatten those profits and immediately hit forward-looking earnings—something no public PBM management can tolerate.
The result is what we at Prodigy call the Transparency Theater: partial disclosures, selective data access, and clever contract language that implies honesty while preserving the status quo.
Cultural and Operational Inertia
Transparency isn’t a software toggle—it’s a cultural rewiring. It demands changing how people are trained, how systems are built, and how incentives are paid.
Legacy PBMs reward teams for maximizing retained revenue; their infrastructure was engineered for opacity. You can’t ask an organization to show all its cards when the dealer’s bonus depends on what stays hidden.
Why Scale Breaks Transparency
Transparency doesn’t scale when your infrastructure profits from confusion.
Real transparency requires synchronized data across claims, rebates, and network contracts—essentially a real-time, audit-ready ledger. For a billion-claim processor, that’s not a modernization effort; it’s an existential threat.
Prodigy’s Embedded Transparency
At Prodigy, transparency isn’t a retrofit—it’s the foundation. It’s a core part of our ethos — in words, in action and in software code. Transparency is part of our operating system for trust—built so every claim, rebate, and fee is visible in real time. No tiers of visibility. No selective disclosure. No “trust us” clauses. Our clients see exactly what we see—because trust scales only when visibility does.
Our Challenge to the Industry
Transparency cannot be modularized. You can’t graft integrity onto infrastructure optimized for arbitrage.
Ask your PBM one question:
Would your transparency survive an independent audit—without excuses, redactions, or NDAs?
Real transparency doesn’t need stage lights. It needs courage, clean code, and a culture that doesn’t flinch when the curtains lift. We built Prodigy to do just that — make transparency operational, not aspirational. Because when visibility is native, accountability becomes second nature.
If you’re ready to move beyond transparency theater, we’d love to show you what real visibility looks like in practice. Let’s schedule a short demo to experience full transparency at scale.
—Del
About P4P
A Strategic Dose of Clarity in a Noisy PBM Market
Written by Prodigy CEO, Del Doherty, P4P delivers sharp, consultative insights for decision-makers who are tired of legacy models, hidden costs, and passive vendors. Each piece is a prescription—cutting through the noise to reveal what actually drives performance in pharmacy benefit management. No fluff. No spin. Just insight that pays off.
