Health System PBM Ownership Model Shows Benefits Amid Reform Pressure

Why It Matters

Navitus demonstrates that health‑system owned PBMs can meet regulatory demands and offer a transparent alternative, potentially reshaping industry standards. This model also provides revenue diversification for hospitals facing cost‑inflation and labor challenges.

Key Takeaways

• Navitus serves 18 million members across 800 clients nationwide
• SSM Health emphasizes full transparency and pass‑through pricing
• FTC settlements push Big Three toward flat‑fee, transparent models
• Health‑system owned PBMs diversify revenue and support mission alignment
• Legislation mandates flat‑fee Medicare Part D PBM model by 2028

Pulse Analysis

The pharmacy‑benefit manager (PBM) market has come under intense scrutiny as lawmakers and consumer advocates accuse the industry’s largest players of opaque pricing, rebate‑driven list‑price inflation, and spread pricing that inflates employer and government costs. Recent FTC settlements with Express Scripts and CVS Caremark, along with the Consolidated Appropriations Act of 2026, signal a shift toward flat‑fee, transparent PBM services, especially in Medicare Part D. These reforms aim to untangle complex rebate flows and give plan sponsors clearer cost visibility.

Against this backdrop, Navitus Health Solutions—co‑owned by SSM Health—offers a contrasting model built on full price transparency and a pass‑through structure where rebates flow directly to clients. By purchasing drugs through group‑ purchasing organizations or directly from manufacturers, Navitus can disclose exact acquisition costs and apply only a modest administrative markup. This clarity not only aligns with upcoming regulatory mandates but also resonates with employers and health plans seeking predictable drug spend, potentially positioning Navitus as a benchmark for the industry’s evolving standards.

For health systems, owning a PBM like Navitus serves a dual strategic purpose. It diversifies revenue streams, helping offset pressures from labor costs, slower volume recovery, and inflation, as highlighted by Fitch’s AA‑ rating affirmation for SSM Health. Moreover, the integration of pharmacy benefits with existing medical groups and health plans creates a seamless continuum of care, reinforcing mission‑driven objectives while delivering operational efficiencies. As the FTC’s playbook reshapes PBM practices, health‑system owned PBMs could accelerate the industry’s move toward transparency, influencing even the Big Three to adopt similar models.