Replay - Beyond the Big Three PBMs - Inside the SmithRx Model

Research evidence excerpt

Replay - Beyond the Big Three PBMs - Inside the SmithRx Model

Health Care | Healthcare Technology & Distribution

May 22, 2026

Elizabeth Anderson Joanna Zhou Amir Farahani, CFA Ayush Vyas

212-446-5632 212-446-5659 646-551-8518 646-551-8512

elizabeth.anderson@evercoreisi.com joanna.zhou@evercoreisi.com Amir.Farahani@evercoreisi.com Ayush.Vyas@evercoreISI.com

Yesterday we hosted Jake Frenz, CEO and founder of SmithRx, a transparent PBM serving ~1.5 MM members across

~5,000 self-insured employers. During the webinar, we discuss SmithRx's business model as a transparent PBM and

dig into how the broader PBM market is reorienting around transparency and the implications for profit margins, growth,

and competition (including from DTC).

Our webinar replay is available here.

Key Takes on SmithRx:

• SmithRx is a transparent PBM with revenues only from PMPMs: no spread, no retained rebates, no vertical

integration; full revenue disclosure to clients

• Scale and growth are inflecting: ~1.5 MM members across ~5,000 self-insured employers, ~20% average

cost savings, ~80%+ revenue CAGR over the last five years, with 750+ new clients in January 2026 alone

(typically 20-80/month)

• A breakout into the enterprise market underway: recent wins include US Steel, Workday, Fresenius Kabi,

Boston Globe, and United Ag (multiple 40K+ life accounts); SMB foundation built the repeatability needed to

scale up-market

• Technology is the structural moat: distributed architecture built from scratch (vs. 1990s COBOL stacks),

SaaS-like gross margins, and an AI-ready foundation purpose-built to thrive at 3-4% operating margins

• SmithRx makes less on take-rate per member, but the tech-driven cost structure produces strong gross

margins, enabling competitive pricing without best-in-class COGS