Breaking Open the Black Box: How Transparent PBMs Are Reshaping Pharmacy Benefits with Jake Frenz, Founder & CEO of SmithRx

Pharmacy costs now represent 35 to 50% of total healthcare spend for many employers. Yet, most plan sponsors are still operating inside a black box they can't see into, let alone control. In this episode, Jake Frenz, Founder and CEO of SmithRx, breaks down how the traditional pharmacy benefit manager model became one of the most opaque and conflicted structures in all of healthcare, and what employers can actually do about it. A Marine Corps veteran turned serial healthcare entrepreneur, Jake helped build Collective Health from the ground up before launching SmithRx a decade ago, now serving 1.5 million members across 5,000 self-insured companies. -------  “ When you think about that $350,000 rebate check coming back to pay for the programs, think about what's going out the door. Think about from a finance standpoint, what the cash out is that you have to true up with that rebate. You're paying a bolus, you're paying an increased amount upfront to get a rebate in arrears. There's a time, value, money, and overall concern there. I think that it's an easy argument to have, or discussion really, with the CFO around move to a transparent model, try to pull back, preference biosimilars or other low net cost options. And rebates, at the end of the day, today are real. Should rebates exist in this ecosystem? Probably not. I don't think they should. But that is a matter of fact today, and you have to meet the market where it's at. Those rebates will continue even under a transparent pass-through model. They just may be less, and that's okay because you're going to look at that per member, per month, true net cost, what your cash out is going to be, and that is a very easy, simple story to tell.” – Jake Frenz -------  Episode Timestamps: *(01:24): Jake Frenz's background: from Marine Corps to PBM founder *(03:00): A brief history of pharmacy benefit managers and how we got here *(10:14): Jake's journey from Anthem and Collective Health to founding SmithRx *(18:27): What transparency actually means and why it equals control *(20:33): The questions every plan sponsor should be asking their PBM *(40:37): AI in pharmacy benefits: where it helps and where accuracy is non-negotiable -------  Links: Connect with Jake Frenz on LinkedIn Connect with Dane Thorwaldson on LinkedIn Learn more about Collective Health Learn more about Caspian Studios -------  If you’re enjoying The Benefits Playbook, we’d love your support. Take a moment to rate and review the show wherever you’re listening — it really helps others discover us and join the conversation on the future of employee benefits. And while you’re there, don’t forget to hit subscribe so you never miss an episode. If you know a colleague or friend who’d enjoy the conversation, share it with them too. Thanks so much for listening, and we’ll see you next time. -------  The views expressed in this podcast are those of the speakers and do not necessarily reflect the views or positions of Collective Health, its affiliates, sponsors, employees, or customers. This podcast is not intended as legal, medical, or financial advice. If you have any questions or concerns in these areas, please consult with a qualified professional. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.