Pharmacy Benefits Unbundled: What Employers Should Know About Carving Out Prescription Drug Benefits

Pharmacy Benefits Unbundled: What Employers Should Know About Carving Out Prescription Drug Benefits

Employers are constantly seeking ways to optimize their benefit offerings. One crucial aspect that demands careful consideration is the management of prescription drug benefits. The decision to carve-in or carve-out pharmacy benefits can have a profound impact on both the cost and quality of healthcare for employees. We’re here to explore the definitions of carved-in and carved-out pharmacy benefits, explore the pros and cons of each, and make a compelling case for the advantages of unbundled pharmacy benefits.

Understanding Carved-In and Carved-Out Pharmacy Benefits

Carved-In (Bundled) Pharmacy Benefits:

In a carved-in approach, pharmacy benefits are bundled with the overall healthcare plan. This means that both medical and prescription drug benefits are managed by a single entity. This integration might provide a seamless experience for employees, but it also comes with certain drawbacks.

Carved-Out (Unbundled) Pharmacy Benefits:

On the other hand, a carved-out strategy involves separating pharmacy benefits from the medical plan. In this scenario, employers work directly with a Pharmacy Benefit Manager (PBM) independent of their medical plan. This unbundled approach allows for more flexibility and control over the pharmacy benefit, offering a range of advantages that are worth exploring.

Pros and Cons of Carving-In Pharmacy Benefits


  • Simplified Administration: Carved-in plans can simplify administrative processes by consolidating medical and pharmacy benefits under one umbrella. This integration often streamlines communication, making it easier for employees to understand and utilize their benefits.
  • Coordination of Care: Carved-in plans promote better coordination of care by having medical and pharmacy benefits managed by the same entity. This alignment can enhance communication between healthcare professionals, leading to more comprehensive and integrated patient care.


  • Lack of Transparency: One major drawback of carved-in pharmacy benefits is the lack of transparency. Employers might find it challenging to access detailed data on prescription drug spending, making it difficult to identify areas for cost containment or optimization.
  • Limited Flexibility: Bundling pharmacy benefits will limit the employer’s ability to tailor the prescription drug plan to the specific needs of their workforce. This lack of flexibility can hinder the customization and cost saving measures necessary to address the unique health challenges of employees.
  • Dependency on a Single Vendor: Relying on a single vendor for both medical and pharmacy benefits might lead to a lack of competition, potentially limiting the employer’s ability to achieve favorable contractual terms and pricing.

The Advantages of Unbundled (Carved-Out) Pharmacy Benefits


  • Data Access and Insights: One of the most significant advantages of unbundled pharmacy benefits is the enhanced access to data and insights. With a direct PBM partnership, employers have greater visibility into prescription drug spending, enabling them to identify trends, control costs, and make informed decisions.
  • Customization and Flexibility: Unbundled pharmacy benefits offer unparalleled customization and flexibility. Employers can choose a PBM partnership that aligns with their specific needs, goals, and desired outcomes that cater to the unique health requirements of their workforce.
  • Cost Control Opportunities: The separation of pharmacy benefits allows employers to implement targeted cost control strategies. By having a clearer understanding of prescription drug utilization, employers can explore and achieve plan-specific innovative cost containment solutions. 
  • Enhanced Competition: Carving out pharmacy benefits fosters healthy competition  within the healthcare arena, leading to lower overall healthcare costs and improved service offerings. This competition empowers employers to choose the PBM that provides the best value for their investment.

Emphasizing the Power of Data

Being unbundled means having the power of data at your fingertips. Employers can leverage comprehensive reports and analytics to gain insights into prescription drug utilization patterns, identify high-cost medications, and implement strategies to optimize their pharmacy benefit plans. This data-driven approach is a cornerstone of effective benefits management, allowing employers to make informed decisions that positively impact both cost and employee well-being.

While bundled options may appear to offer simplicity, the advantages of unbundled pharmacy benefits cannot be overstated. Unbundling provides employers with the tools needed to navigate the intricate landscape of prescription drug costs, customize plans to fit their workforce, and harness the power of data for strategic decision-making. As the healthcare landscape continues to evolve, employers must carefully consider the benefits of being unbundled to ensure they are not only optimizing costs but also enhancing the overall health and well-being of their workforce.

MaxCare’s Commitment to Transparency: Empowering Employers Through Data Access

At MaxCare, our philosophy on transparency and shared data and analytics stands in stark contrast to many of our competitors. We firmly believe that the plan’s data is invaluable, and employers should not only have access to it but also wield the power to make informed decisions. Our commitment to transparency, customization, and cost control sets us apart in the world of pharmacy benefit management.

We understand that the integration of pharmacy and medical contracts in carved-in arrangements often leads to limited transparency and audit rights. With a carved-in approach, employers are left in the dark about crucial specifics such as performance, rebate terms, and the key components that truly determine a plan’s overall cost and savings opportunities.

MaxCare recognizes that the employer’s ability to make strategic decisions hinges on having comprehensive data. Our philosophy revolves around empowering employers to access drug claims and other pertinent data, providing them with the insights necessary to understand and optimize their pharmacy benefits program fully.

Customization for Savings:

MaxCare’s carved-out approach opens doors to customization, allowing employers to explore cost control opportunities that align with their specific needs. Among the additional solutions available are copay assistance, alternate funding, and reference-based pricing for generic medications. 

Transparency Beyond Comparison:

In the realm of pharmacy benefit management, transparency is a non-negotiable aspect. Carved-out pharmacy arrangements, as facilitated by MaxCare, deliver far more transparency compared to their carved-in counterparts. This level of transparency enables employers to have a clearer understanding of their pharmacy performance and potential cost saving solutions, paving the way for more informed decision-making.

Optimizing Employee Health Plans:

Carving-out a prescription drug program emerges as a critical component in optimizing employee health plans. The flexibility and control offered by this approach empower employers to navigate the intricacies of their benefits program with precision. Transitioning from a carved-in to a carved-out arrangement has proven to be a strategic move for employers, frequently resulting in an average reduction of 25% in their pharmacy spend for the first year.

Fortune 100 Stamp of Approval:

The success stories speak volumes – over 90% of Fortune 100 companies opt for a carved-out pharmacy arrangement. This overwhelming adoption underscores the effectiveness of this approach in not only controlling costs but also providing the transparency and flexibility needed for comprehensive benefits management.

In conclusion, the carved-out pharmacy benefits option with MaxCare is not just a cost control strategy; it’s a comprehensive solution that empowers employers to tailor their benefits program specific to the plan’s unique needs and goals to achieve substantial savings and make informed decisions. 

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