EPIC’s benefits president on pharmacy benefit manager reform, and why your health plan needs attention now
Picture: Adam Okun (second from the left) is the president of Employee Benefits Organization at EPIC Insurance Brokers & Consultants.
Adam Okun has spent two decades inside the U.S. group benefits market, most recently as president of Employee Benefits Organization at EPIC Insurance Brokers & Consultants in New York. His message for HR directors and plan sponsors right now is straightforward: pharmacy costs are no longer a line item to skim past in the renewal meeting. They are the central challenge in employer healthcare, and most organizations are not managing them anywhere near as well as they could be.
The number that should stop every HR leader in their tracks
Pharmacy spending has become the dominant cost driver in employer-sponsored health plans, and the trend line is moving fast. For middle-market employers specifically, Okun says pharmacy is approaching approximately 35 percent of total healthcare budgets for 2027 renewals among the employers his firm works with, a figure that reflects both specialty drug exposure and PBM cost extraction that larger employers have historically been better positioned to manage.
The profits embedded in that spend are not flowing to care. They are captured by pharmacy benefit managers (PBMs), through spread pricing, rebates, and contract terms that most employers have never examined.
“There’s a reason why CVS purchased Aetna,” Okun said. “There’s a reason why the majority of the earnings on UnitedHealth Group’s calls are driven by Optum, not by UnitedHealthcare. Pharmacy is where the profits overwhelmingly lie.”
EPIC’s response was to integrate Pharmaceutical Strategies Group (PSG), an EPIC company and formerly one of the largest independent pharmacy consulting practices in the country, historically serving health plans, large insurers, and Fortune 100 companies, into its middle-market consulting platform, making clinical and contractual pharmacy expertise available to employer clients at a scale that was previously out of reach.
A well-managed pharmacy consulting relationship, according to Okun, can produce approximately a 30 percent reduction in pharmacy spend. At current pharmacy cost levels, that translates to a meaningful reduction in total plan costs. Without that expertise, “any major middle-market employer that doesn’t have an expert pharmacy consultant aligned to the relationship is almost certainly hemorrhaging 5 to 10 percent at a minimum out of their total healthcare spend,” he said.
What HR directors should be asking right now
Okun’s practical advice to plan sponsors starts with the contract. Request your PBM contract and read it carefully. The specific language around how average wholesale price (AWP) is defined, and what qualifies as single-source generics, can have significant financial consequences that are easy to miss without specialist support.
Read more: Why HR leaders should pay attention to CHOICE arrangements
Then pull your group-specific utilization data, which drugs your members are using, at which pharmacies, and under what pricing arrangements for specialty drugs. With both the contract language and the claims data in hand, a clinical expert can assess whether your pharmacy program is structured in your organization’s interest or the PBM’s.
The broader shifts every plan sponsor should understand
Beyond pharmacy, Okun points to a broader transformation in how employers are approaching their health plans. Self-funded and level-funded arrangements are now accessible to a much wider range of organizations and give HR leaders visibility into claims data that fully insured plans simply do not provide.
Engineered networks, steering members toward providers who score highest on quality and efficiency through incentive design are proving effective for employers willing to take that step. The range of point solutions available for specific conditions, from behavioral health to weight management, also means HR teams no longer have to accept whatever a large carrier bundles together.
Read more: Got an insurer rebate? ERISA wants the employee share used by Dec. 30
The consolidation wave rolling through the corporate landscape is adding urgency to all of this. Private equity, family offices, and other new capital allocators are scrutinizing employee benefit program spend in ways that HR teams have not previously had to navigate.
“There’s no longer the luxury of just resting on your laurels or relying upon a social relationship,” Okun said. The employers managing these pressures best are treating their health plan as a year-round strategic decision rather than an annual renewal exercise.
Okun is also clear about where technology fits into this picture. Artificial intelligence will increasingly automate the administrative and analytic functions of benefits consulting, but it will not replace the judgment required to design a plan, manage a PBM relationship, or govern a deconstructed insurance purchase. Those decisions are becoming more consequential, not less, as the cost environment intensifies.
“The spectrum of options is very robust,” he said, “more robust and creative than I’ve ever seen at any point in my career.”
For HR leaders, that is both a challenge and an opportunity. The employers who engage with that complexity, who ask for the contract, pull the data, and treat pharmacy as a strategic rather than an administrative question are the ones who will find real savings. The ones who don’t are paying for someone else’s profits.
