January 6, 2021

Driving Affordability by Reducing Wasteful Pharmaceutical Spending

PBGH studied wasteful pharmaceutical spending and discovered a twisted and opaque supply chain that often favored higher-priced unnecessary drugs. 

Key program elements

  • Evaluated the drug utilization data of 2.5 million claims from 15 self-insured employers to estimate savings from reduced use of drugs.
  • Investigated PBM industry’s profit model.


  • 6% of drugs were wasteful (868 different drugs)
  • $63.3 Million savings potential
  • 3-24% Reduced spending on PBM
  • 8 Drugs accounted for a quarter of the savings