The debate over prescription drug costs keeps circling the same ground: more calls for transparency, more government mandates, more scrutiny of pharmacy benefit managers, or PBMs.
It comes from an understandable place. Drug prices are high. The system is complex. The cost of health care continues to rise, putting pressure on patients, employers, health plans, and taxpayers.
If it feels like we’re not making enough progress, it's because we're asking the wrong question.
After more than two decades in health care, one lesson stands out: creating value is not the same as delivering it. A company can negotiate a lower price, secure a rebate, or generate value somewhere in the system. What matters is where that value goes after it is created. Does it go to those paying for that care, or to outside investors? Transparency matters, and recent reforms driving more of it are a good thing. But revealing how the money flows doesn’t change where it ends up. That takes aligned incentives.
Company structure is where alignment starts: structure creates the incentives that shape a health care company’s behavior, decisions, investment priorities, and outcomes. No ownership structure is inherently right or wrong, but different structures incentivize different things. A company built to deliver quarterly returns to shareholders will, over time, make different choices than one built to return value to health plans, plan sponsors such as employers and unions, and the patients whose coverage they support. In other words, the people who pay for care.
The company I lead offers one example. Prime Therapeutics is owned by independent, not-for-profit Blue Cross and Blue Shield health plans who are deeply invested in local communities around the country. We are not publicly traded and do not have outside shareholders. In our 30-year history, not one dollar of value generated by Prime has gone to Wall Street investors. That doesn't mean we're always right. But it does mean our incentives are different. And incentives, not intentions, are what this debate should be about.
Prime operates with a margin of less than half a percent. And that’s by design. We deliberately structured our business to enable the vast majority of the value we generate through our model to flow back to the employers, health plans, and patients we serve. Without a mandate to generate returns for outside shareholders, that modest margin is reinvested in services, tools, and programs that improve affordability, outcomes, and the patient care experience over the long term.
The difference can be seen in how we operate every day. It shows up in the decisions we make and the solutions we pursue. A good example is pharmacy choice. The debate over whether PBMs should be allowed to own pharmacies is not really about ownership. It is about whether ownership creates incentives to steer patients toward owned pharmacies rather than allowing clinical need, patient preference, quality, and cost to guide care decisions.
When incentives are aligned, using an affiliated pharmacy is not the same as steering prescriptions to one. Prime owns a small mail and specialty pharmacy, and some health plans and employers choose to use it when doing so helps lower costs or improve care. But Prime's business model does not depend on prescriptions being filled through it. In fact, less than half a percent of the prescriptions we manage are dispensed through it.
This flexibility allows Prime to pursue different approaches. For example, Prime guides patients to specialty pharmacies embedded within the health system or clinic where they already receive care and to networks that coordinate care across multiple specialty pharmacy options rather than relying on a single dispensing pharmacy. Solutions like these are built on the same principle: choices that prioritize care, convenience, quality, and value become available when incentives are aligned with patients and those who pay for care.
That doesn’t make us perfect, but I do encourage us to ask better questions of PBMs. What does your business model reward? How are your incentives aligned with patients and those who pay for care? And when your company succeeds, who ultimately benefits?
For employers and health plans, that means looking beyond spreadsheet discounts and disclosures to understand whether your PBM is built and incented to consistently deliver value to you and the people you cover. For policymakers, it means evaluating every policy through a simple lens: will it align incentives in ways that save taxpayers real money and make it easier for Americans to afford care?
I believe most people in health care are trying to do right by patients. But health care is too important to rely on good intentions alone.
Over time, every organization follows its incentives. The question we should be asking is whether those incentives are aligned with the people the health care system is meant to serve.
Mostafa Kamal is CEO of Prime Therapeutics.
