EP397: The Minefield That Is a PBM Contract and Also Some Advice for EBCs Who Are Taking Money Under the Table, With Paul Holmes

The Minefield That Is a PBM Contract and Also Some Advice for EBCs Who Are Taking Money Under the Table, With Paul Holmes (EP397)

Signing a Standard PBM Contract Could Be Costing Your Company 30% to 40% Above Market. Episode 397.

Stacey Richter talks with Paul Holmes, JD, an ERISA attorney specializing in PBM contracts, about the buried treasures hidden in standard pharmacy benefit manager contracts—and why plan sponsors need independent, third-party review before they sign.

WHAT YOU'LL LEARN

✅ Why signing a PBM's standard model contract can mean paying 30% to 40% over market for pharmacy benefits

✅ What the roughly 17 common costly terms buried in typical PBM contracts actually do

✅ Why an independent third party—not your existing EBC—should review every PBM contract

✅ How the Consolidated Appropriations Act (CAA) exposes plan sponsors to new ERISA fiduciary-breach lawsuit risk

✅ What red flags suggest an EBC may be taking undisclosed payments at the plan sponsor's expense

✅ Why a lawyer-provided disclosure statement without disclaimers is a reasonable ask of any EBC relationship

WHY THIS MATTERS

A few thousand dollars in independent legal review could save a company millions in overpaid drug spend—and now, post-CAA, protect it from real fiduciary-breach litigation exposure. Holmes's minefield map gives plan sponsors and their advisors a concrete checklist for a contract category most employers sign without truly understanding.

MENTIONED IN THIS EPISODE

EP379 with AJ Loiacono: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Episode Page

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00:00 Introduction.

06:06 What are Paul's usual observations when a PBM contract crosses his desk?

06:57 "If you just sign … one of their model contracts …, you're probably gonna pay 30% to 40% above market on your drug spend."

10:35 What is a PBM lawyer? And why is it important to find an ERISA PBM lawyer?

15:37 EP379 with AJ Loiacono.

16:05 Who is on the hook for the cost of the PBM contracts?

20:36 What's the problem with most ERISA lawyers today?

22:28 Lawsuit about PBM contract.

27:15 What's Paul's advice for benefits consultants?

31:11 How much might a plan sponsor be paying their consultant versus what a consultant might be making from a PBM?