Drug spending is rising sharply, with high-cost GLP-1 medications driving nearly half of the increase in 2024 with no signs of slowing down. That pressure is prompting health systems to rethink the traditional pharmacy benefit manager model, where pharmacy benefits are outsourced to third parties. Increasingly, organizations are deciding to bring those capabilities in-house.
Beth Israel Lahey Health (BILH), a northeastern health system with 39,000 employees and nearly 50,000 covered lives, is a real-world example of this trend. The organization was seeing rising costs but didn’t have clear visibility into what was really driving the increase. While plan spend continued to increase, it was unclear what it actually cost the organization to provide pharmacy benefits to its employees and how much of that spend was leaving the system and accruing to its existing PBM.
As the organization evaluated its options to try and bend the cost curve, it decided to invest in their own PBM to better align their clinical strategy, pharmacy operations and benefit design. Rather than starting from scratch, BILH formed a PBM called InScript and partnered with RxSense to provide the infrastructure needed to execute and adapt the model over time.
From outsourcing to insourcing
Moving PBM functions in-house requires alignment across teams, including HR, brokers, and leadership. It's not just a pharmacy decision. BILH didn’t act impulsively; they built a business case over time. As their pharmacy operations grew, the limitations in the traditional PBM model became harder to ignore.
“When we looked at the traditional PBM model, the incentives were not fully aligned with our goals,” said Sherman Zemler Wu, President of InScript. “Our focus is on lowering the total cost of care and reinvesting in our patients, so we needed a model that supported those priorities rather than working against them.”
InScript was launched in 2024 as a health system-backed PBM focused on transparent pharmacy benefits management, combining deep pharmacy operational knowledge with a health system’s clinical expertise. RxSense’s technology supports their claims processing, formulary management and program execution. “RxSense has been a great partner as we developed unique programs designed to bend the rising cost curve in pharmacy benefits,” said Zemler Wu.
“Health systems want greater control over how their pharmacy benefits are designed and managed,” said Tom Gilson, President of Enterprise Solutions at RxSense. “We provide the infrastructure that allows our clients to execute on their strategy without taking on the full operational burden themselves.”
With RxSense as its technology backbone, InScript launched its PBM operations with access to real-time claims adjudication and configurable benefit tools, supporting more efficient pharmacy operations and continued expansion of in-house capabilities. The partnership helped the organization move from strategy to execution and establish a more aligned approach to managing pharmacy benefits.
A real-world test: Managing GLP-1s
GLP-1 medications quickly became a stress test for the new system. Utilization increased rapidly, and plan costs followed. Stakeholders wondered whether these therapies could remain on formulary.
Rather than restricting access, as many plans do, BILH redesigned how GLP-1s are managed to maintain access, control costs, and most importantly, improve outcomes. For patients using GLP-1s for weight loss, the program created customized clinical criteria that members had to meet, including requirements to utilize lowest cost GLP1s, and a mandated visit with a weight loss pharmacist to ensure proper titration, enhanced adherence and support in the member’s weight loss journey. Additionally, prescriptions had to be filled through system-owned pharmacies. If these requirements were not met, coverage was denied.
A key advantage of investing in their own PBM was that BILH was able to understand the overall costs of providing employees with their drug benefits and then implement plan designs to improve health outcomes and control costs. This approach added complexity, particularly in managing prior authorizations across different use cases, requiring frequent updates to reflect clinical guidance, and utilization and fill trends at internal pharmacies.
“We wanted to keep these therapies available because of the positive impact they have on people’s lives, but we needed to manage them in a sustainable way,” explained Zemler Wu.
The partnership with RxSense made it possible to act on those objectives. The platform enabled the team to create and adjust prior authorization criteria quickly to implement program changes as needed.
With this flexibility, in the first year of implementing the GLP-1 program, patients saw close to 80% continuance rate at 1 year, 13.5% average weight loss at 12 months, a decrease in utilization of antihypertensive drugs, and despite a 62% increase in prescriptions filled, BILH managed to bend overall costs lower than trend allowing them to keep GLP-1s on formulary.
This kind of outcome can be difficult to achieve without greater visibility into costs, closer alignment across clinical and pharmacy teams and the ability to adapt programs quickly.
The bigger opportunity: Aligning data, incentives, and care
The results point to a broader shift in how pharmacy benefits can be designed and managed. Beyond individual programs, the opportunity lies in bringing together data that is often kept separate. Traditional models can limit visibility into the full cost of care, making it harder to align incentives and manage spend effectively. In-house approaches offer greater control, transparency and flexibility to balance cost and patient access.
“Bringing visibility to pharmacy PBM costs and medical spend gives health systems a clearer picture of what is driving costs and where they can take action,” said Gilson. “Our work with InScript shows what’s possible when insights are paired with the right infrastructure and a partner that’s committed to building together.”
For InScript, this approach builds on the health system’s clinical and operational strengths, allowing BILH to apply its expertise to benefit design and management. With direct access to providers, pharmacies, and patients, the organization can make more informed decisions about both cost and care.
“RxSense has been instrumental in helping us operationalize this model,” said Zemler Wu. “The flexibility of the platform enables us to continuously adapt and align our clinical and operational strategy with execution.”
Executing this model requires both infrastructure and expertise, and as interest in insourcing PBM functions grows, organizations find it difficult to implement without them. Many health systems lack the knowledge, experience and resources to build and manage a PBM on their own. For BILH, they have shifted pharmacy benefits from a fixed cost center to a more active part of managing total cost of care, combining internal expertise with the operational support needed to manage costs while maintaining access for patients.
For organizations exploring a similar approach, RxSense provides the infrastructure to support health systems in building and operating their own PBM models. To learn more about how RxSense supports a more transparent and aligned approach to pharmacy benefits, visit www.rxsense.com.
The editorial staff had no role in this post's creation.