When insurance companies own the entire medical supply chain, employers are right to ask: Whose bottom line is being protected – mine or the insurer’s?
That question is driving a shift among employers who are increasingly rethinking whether carving out pharmacy benefits to large Pharmacy Benefit Managers (PBMs) – often owned by vertically integrated insurers — really delivers the value it promises.
The Illusion of Integration
Vertical integration – where a health insurer owns controlling interests in care delivery, pharmacies, PBMs, and even drug manufacturing – is often pitched as a way to streamline care and lower costs.
But surveys show that employers and consultants see it differently: as a consolidation of power that limits choice, raises costs, and blurs the line between healthcare and shareholder profit.
A recent survey of more than 300 employers found that nearly two-thirds are actively exploring alternatives to the “Big 3” PBMs: CVS Caremark, Express Scripts, and OptumRx.
Why? Because they’re looking for something vertically integrated systems struggle to deliver: transparency, flexibility, and value that’s accountable to employers.
Insurers that aren’t limited by vertical integration – like Capital Blue Cross – are gaining traction because they offer the transparency to negotiate with vendors based on quality and cost. Employers who make the switch report lower premiums and better control over benefit design.
“Employers deserve transparency – not just in pricing, but in how decisions are made,” said Dr. Jeremy Wigginton, Chief Medical Officer at Capital Blue Cross. “When health plans are less restricted from ownership conflicts, they can focus on what matters most: member outcomes and value.”
When Ownership Drives Outcomes
Insurers that are not vertically integrated have the flexibility to work with partners based on performance and value. They’re free to:
Negotiate based on quality and cost.
Operate with open contracting.
Build pharmacy strategies around value, not vertical control.
Consider biosimilars, lower-cost alternatives to high-priced biologics like Humira.
In 2025, the Big 3 restructured their formularies to exclude nearly all Humira biosimilars, instead favoring private-label alternatives produced through their PBM-owned subsidiaries like Cordavis (CVS), Quallent (Cigna), and Nuvaila (UnitedHealth).
By contrast, Capital Blue Cross, which does not own a drug manufacturer, covers both Humira and a broad range of biosimilars.
This approach offers employees the flexibility to work with their doctors to choose the best medication together. In turn, employers can capitalize on the potential cost savings of biosimilars while minimizing financial and experience risks that can happen when their employee cannot switch from a biologic to a biosimilar.
Delivering Value Through Transparency
Research from RAND shows that vertically integrated health plans often fail to reduce costs or improve quality. By contrast, plans like Capital Blue Cross demonstrate how conflict-of-interest free models can drive results:
Flexible provider and PBM networks based on performance.
Clear alignment between employer goals and plan design.
Transparent pricing and open decision-making.
For instance, Capital Blue Cross was the first health insurer in the nation to work with Mark Cuban Cost Plus Drugs to help members save on their generic prescriptions. Cost Plus Drugs has a simple, transparent cost formula on hundreds of commonly used medications to treat everything from high blood pressure to diabetes to mental health.
In another program, Capital Blue Cross helped employer groups save more than $11 million in 2024 on specialty drugs, lowering the expense of treating conditions like arthritis, psoriasis, and Crohn’s Disease.
Built for Employers, Not Profits
When your health plan doesn’t have a vertically integrated supply chain, you can trust its decisions are driven by your goals. That’s the value of conflict-of-interest-free administration.
“Our focus has always been on value, transparency, and member outcomes,” said Gary Petruzzelli, Vice President of Strategy and Pharmacy Services at Capital Blue Cross. “We’ll keep assessing the best path forward and make changes when they’ll deliver the greatest value to our members.”
And that’s the point: When health plans are built around transparency – not profits – they build trust and deliver value. In a market defined by consolidation and complexity, clarity is your advantage. And the right partner makes all the difference.