Rethinking Pharmacy Benefits: A Strategic Opportunity for Michigan Manufacturers

This article appeared in the August 2026 issue of MiMfg Magazine. Read the full issue and find past issues online.

Michigan manufacturers are operating in a demanding environment. Higher input costs, supply chain uncertainty, pressure to invest in automation and the ongoing competition for skilled workers are forcing employers to examine every controllable expense. At the same time, health care and prescription drug costs continue to rise, putting additional strain on benefit budgets and total compensation strategies.

For an industry built on precision, productivity and cost discipline, pharmacy benefits may seem like a back-office issue. They are not. Every avoidable dollar spent on inflated drug pricing is a dollar that cannot be invested in people, equipment, training or growth. That makes pharmacy benefit strategy a business issue, not just a benefits issue.

Why PBM Strategy Matters Now

Traditional “big box” pharmacy benefit managers (PBM) were designed to aggregate purchasing power and negotiate discounts. However, their revenue models often rely on retained rebates, spread pricing and complex formularies. In some cases, higher-priced drugs with larger rebates may be favored over lower-cost alternatives, creating a misalignment between PBM profitability and employer savings.

A Conflict Free Accountable Alternative

This is why some self-insured companies are exploring carve-out or niche PBMs. These models typically emphasize pass-through pricing, clearer administrative fees and lowest-net-cost decision-making. Their value proposition is alignment: reducing total drug spend rather than maximizing intermediary revenue.

Niche PBMs may also be more willing to integrate with complementary cost-management partners, including advocacy organizations. These firms help identify manufacturer-sponsored patient assistance programs and other funding mechanisms that can reduce plan-paid and member-paid costs for certain high-cost specialty medications. For manufacturers with even a small number of high-cost claims, this type of coordination can materially affect the cost curve. Traditional PBMs steer away from these programs because they erode their own profitability through rebate losses.

What Employers Should Evaluate

Transitioning away from a traditional PBM model requires careful review. Employers should evaluate contract transparency, rebate treatment, formulary strategy, specialty drug management, integration with the medical plan, employee communication, compliance requirements and the vendor’s willingness to provide actionable data.

Bottom Line

For Michigan manufacturers, PBM strategy is increasingly tied to competitiveness. A more transparent, aligned pharmacy model may help protect margins, support workforce stability and create room for investment in the people and technology that keep Michigan manufacturing moving forward. The opportunity is not simply to switch vendors but to manage pharmacy benefits as a strategic lever for long-term resilience.

About the Author

Sandra Scheppler is a health care benefits consultant specializing in pharmacy benefit solutions. She works with employers, labor organizations and other public sector entities to improve health outcomes while managing costs. She may be reached at sandra.scheppler@unifiedlaborrx.com.

Unified Labor Rx, also DBA Unified Rx Solutions, is a Basic Associate Member and has been an MMA member company since February 2026.