By Erin L. Albert, MBA, PharmD, JD, DASPL edited by the author in AI
Photo from Pexels.com
Back in 2022, I wrote an article on Pharmacy switches and was asked to provide an update. You can read the original article here: https://erinalbert.medium.com/turning-the-light-on-pharmacy-switches-22b996c2cf07.
The definition of a pharmacy switch hasn’t changed much over the years — but what it does absolutely has.
At its core, a switch is still a high-speed digital router. When a pharmacist scans a prescription, the switch sends the claim to the PBM and asks two simple questions:
Is this drug covered?
What does the patient owe?
The PBM processes the claim and sends the response back through the switch to the pharmacy. The pharmacist sees the copay, collects payment, and dispenses the medication.
That’s the basic model.
But in 2026, switches are no longer just neutral messengers moving data from Point A to Point B; they are active participants in the transaction.
What Switches Actually Do Now
- Real-Time AI “Pre-Edits”
In 2026, many switches run artificial intelligence audits on claims before they even reach the PBM. These systems look for:
Billing errors
NCPDP format mistakes
Duplicate therapy flags
Compliance risks
DAW inconsistencies
Coordination of benefits issues
If something looks wrong, the switch may reject or flag the claim before it is ever adjudicated.
This “pre-edit” layer has grown significantly after increased federal scrutiny on billing accuracy and fraud prevention. Pharmacies may see fewer post-payment audits because more issues are being caught up front — but that also means switches now influence the claim outcome earlier in the process.
- Copay Manipulation Through Manufacturer Contracts
This is where things get more complicated.
After the PBM adjudicates a claim, the switch receives the response. Before that response is transmitted back to the pharmacy, the switch may:
Apply a manufacturer copay offset (eVoucher)
Reduce the patient’s out-of-pocket cost
Trigger secondary billing to a manufacturer assistance program
In simple terms: the patient sees a lower copay at the counter, but the discount is funded by the drug manufacturer — not the PBM and not the plan sponsor.
The switch acts as the billing middle layer:
The PBM processes the claim.
The switch modifies the copay using a manufacturer agreement.
The switch later bills the manufacturer to recover the discount amount.
Many pharmacists do not realize that this adjustment can happen after PBM adjudication but before the response appears on their screen.
This is not illegal. But, it does raise important questions:
Is this influencing formulary placement?
Is it steering toward brand drugs?
Is it increasing overall plan spend while lowering patient cost at the counter?
Those debates are ongoing in 2026.
Who Owns the Switches? (The 2026 Landscape)
The ownership picture matters — because ownership drives incentives.
Change Healthcare (Owned by Optum / UnitedHealth Group)
Still one of the largest switches in the country, Change Healthcare operates under significant federal oversight following the major 2024 cyberattack, which some would argue is the first time the lay public even heard about a pharmacy switch.
In 2026, many pharmacies now use redundant switching, meaning they maintain a backup switch in case the primary system fails. This is a direct response to the nationwide outage that froze claims processing in 2024.
Change also operates its Intelligent Healthcare Network, integrating analytics across the broader Optum ecosystem. Ownership note: Because Change sits within UnitedHealth Group, questions continue about vertical integration — payer, PBM, switch, and data under one umbrella.
RelayHealth (Owned by McKesson)
RelayHealth remains one of the largest switches and is frequently bundled with McKesson distribution and pharmacy management systems.
Originally, Relay relied on some manufacturer eVoucher arrangements within Change Healthcare. After the 2024 Change cyber breach, Relay built and expanded its own independent eVoucher network – this is a big change since my original 2022 article.
Today, Relay and Change are direct competitors in both switching and manufacturer copay connectivity. Ownership note: Relay sits inside a wholesaler ecosystem, not an insurance company.
Powerline (Owned by RedSail Technologies)
Powerline is the switch owned by RedSail Technologies. RedSail is backed by private equity firms Francisco Partners and Leonard Green & Partners.
RedSail owns:
PioneerRx – Community practice Pharmacy Management Software (PMS)
BestRx – Similar PMS
QS/1 – Similar PMS
Axys (long-term care cloud systems)
PrimeRx (acquired February 2026 – another PMS)
RxMile (delivery management platform)
With access to approximately 16,000 pharmacies and 50 million active patients now that RedSail has acquired PrimeRx in February 2026, RedSail controls a significant portion of the independent and long-term care pharmacy technology ecosystem.
Powerline is currently the only major switch not owned by a large insurer or wholesaler. That independence may become increasingly important in conversations around neutrality and data control.
Net-Rx (MHA – Managed Health Care Associates)
Net-Rx remains a strong player in long-term care and specialty pharmacy switching. Its niche focus has allowed it to maintain relevance in a consolidating market.
Managed Health Care Associates, Inc. (MHA) was acquired by Roper Industries, Inc., a diversified publicly traded company (NYSE: ROP), in 2013 and has been part of Roper’s healthcare and software business segment since.
ROP is a publicly traded company, and top 3 largest majority owners of stock include as of this writing: 1. The Vanguard Group, Inc. (11-12% of outstanding shares), 2. Blackrock, Inc. (8-9%), and T. Rowe Price Group, Inc. (5-6%).
The Rise of “Direct-to-Consumer” Switch-Like Models
In early 2026, new platforms such as TrumpRx.gov and manufacturer-direct programs like LillyDirect introduced shorter claim pathways.
Some of these models:
Bypass traditional PBM-owned switches
Route claims directly to manufacturer discount engines
Operate through HUB services rather than traditional switching (and HUB services in and of themselves are an ever-evolving part of the pharmacy landscape and beyond the scope of this article, but an area worth exploring).
This is still evolving. For now, traditional switches remain dominant — but alternative pathways are expanding.
Technical Codes: The Digital Handshake
Pharmacy switching still relies on the same three key routing codes, borrowed decades ago from banking infrastructure.
When a claim is submitted, these identifiers determine its path:
- BIN (Bank Identification Number)
A 6-digit (sometimes 8-digit) number that tells the system which processor to use. Think of it as the “address” for the claim.
- PCN (Processor Control Number)
Routes the claim to a specific contract or processing bucket within the PBM. Think of it as the “room number.”
- Group Number
Identifies the employer or specific plan design, including copay structure.
In 2026, most insurance cards are digital. QR-based cards auto-populate BIN, PCN, and Group numbers, reducing manual entry errors and technician workload.
Why 2026 Is Different: The PBM Reform Effect
The Consolidated Appropriations Act of 2026 introduced new transparency requirements that impact switches.
Historically, switches could:
Charge per-transaction fees
Add connectivity fees
Structure manufacturer arrangements with limited visibility
Potentially steer claims through preferred pathways
Under new federal guidelines, plan sponsors are demanding:
Disclosure of switch fees
Greater transparency around eVoucher arrangements
Clear separation between routing and revenue generation
The core question regulators are asking is simple: Are switches neutral routers — or revenue-generating middle layers? The answer is still unfolding.
Why Pharmacists Should Care
Switches sit in the middle of nearly every claim you process.
They:
Influence rejection patterns
Affect copay presentation
Connect manufacturers to the claim in real time
Control massive volumes of pharmacy data
Understanding how switches contract, who owns them, and how they generate revenue is no longer optional knowledge. In 2026, the switch is not just plumbing. It is also: policy, data, leverage and increasingly…power.
Questions Every Pharmacy Should Ask About Their Switch in 2026
All pharmacies should know who their pharmacy management system (PMS) vendor is. Most PMS vendors select the switch to partner with or may offer multiple switches. Far fewer pharmacies know the details about their switch. In 2026, that gap matters.
Here is a practical checklist you can use when talking to your pharmacy management software or PMS vendor:
- Who Is Our Primary Switch?
What company processes our claims?
Is it owned by a PBM, insurer, wholesaler, private equity firm, or independent tech company?
Has ownership changed in the last 24 months?
Ownership affects incentives. Incentives affect behavior.
- Do We Have a Secondary (Backup) Switch?
If the primary switch goes down, what is our backup plan, and who is the backup switch?
Is failover automatic or manual?
How long does the transition take?
Has this backup been tested in the past year?
After the 2024 nationwide outage, redundancy is no longer optional. It is risk management and critical to the future success of your pharmacy.
- What Are We Paying Per Claim?
Ask for specifics:
What is the per-transaction switch fee?
Are there separate fees for reversals?
Are eligibility checks billed separately?
Are real-time benefit checks billed separately?
Are there minimum monthly fees?
Are there “bundled” connectivity or network access charges?
Are discounts available for bundled services?
Many pharmacies don’t realize how much of their tech stack cost is tied to switching volume.
- Does the Switch Apply Manufacturer eVouchers Automatically?
Are manufacturer copay programs automatically triggered?
Can we opt out?
Do we know which manufacturers are participating?
Does this influence generic vs. brand selection?
Is there reporting available on how often this occurs?
Pharmacies should understand when copays are being modified after adjudication — and by whom.
- Where Does Our Data Flow?
This is one of the most important questions.
Ask:
Does the switch retain claim-level data?
Is the data de-identified or fully identifiable?
Is it shared within a broader corporate ecosystem (payer, PBM, analytics arm, etc.)?
Is it used for manufacturer contracting?
Is it sold in aggregated form?
What are the data retention policies?
In 2026, data is currency. Pharmacies generate enormous value through claim activity. You should know where that value goes.
- Are AI Pre-Edits Being Applied?
Does the switch run AI audits before PBM adjudication?
Can we see what edits are being applied?
Are those edits configurable?
Do they increase rejection rates?
Do they protect us from downstream audits?
Pre-edits can reduce risk — but they can also change workflow and cash flow.
- Are There Any Steering or Routing Arrangements?
Does the switch prioritize certain claim pathways?
Are some claims routed differently based on payer or manufacturer contracts?
Are there financial incentives tied to those routes?
Neutral routing should mean neutral routing.
- What Reporting Can We Access?
Can we see total switch fees by month?
Can we see eVoucher utilization reports?
Can we audit claim modifications?
Can we track uptime and outage history?
If you cannot see it, you cannot manage it.
The Bottom Line
In 2026, the pharmacy switch is not just background infrastructure. It influences:
Copays
Claim flow
Manufacturer dollars
Data ownership
And pharmacy profitability
Pharmacists have spent decades learning how PBMs operate, since the 1960s. The pharmacy switches in tandem began in the 1970s. However, I never learned about them at all either time I went to pharmacy school, and I often wonder even today whether these are taught in schools of pharmacy around the US.
It’s time to bring them, along with the entire process and life of a prescription to the forefront of our knowledge as a profession. It’s on all of us as pharmacists to understand the life cycle of a prescription.
From the point where a provider writes the prescription in an electronic medical record (EMR) – all the way through to handing the final prescription vial to the patient, this is our professional duty to understand and educate what happens behind the scenes. Equally fascinating but beyond the scope of this article is what happens now with HUBs and direct to consumer prescriptions and routing of prescriptions before they even reach a pharmacy. That exploration, however, is for another article and another time.
The pharmacy switch is no longer just the messenger. It is part of the business model.
Alternate graphic:
Erin L. Albert is Chief of Pharmacy Relations, Network, and Professional Affairs at Mark Cuban Cost Plus Drug Company, PBC. Opinions in the article, however, are hers alone, and not necessarily those of MCCPDC.
Related reading: Explore more coverage in our Operations section and browse the latest analysis on Dispense Times.
