What is a Pharmacy Benefit Manager?
Pharmacy Benefit Managers (PBMs) are third-party administrators of prescription drug programs for health plans, employers, and other organizations.
PBMs are responsible for:
As prescription drug spending in the United States has risen dramatically, the role of PBMs has become increasingly important.
Pharmacy Benefit Managers work with health plans and employers to develop drug formularies which are the lists of drugs covered by the plan and the prices the plan will pay for those drugs.
PBMs negotiate with drug manufacturers to get the best prices for the drugs on the formulary. PBMs are also responsible for negotiating with pharmacies to set the prices they will pay for drugs when members use their benefits.
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One of the helpful ways that a Pharmacy Benefit Manager controls drug costs is by promoting the use of generic drugs. Generic drugs are identical to brand-name drugs in their active ingredients but are often much less expensive. PBMs encourage the use of generic drugs by offering lower copayments or other incentives to members who use them.
Another responsibility PBMs play is in managing drug utilization; they do this by using various tools and programs to promote the appropriate use of drugs and help identify cases of potential drug abuse or overuse. For example, PBMs may require prior authorization for certain high-cost drugs or even limit the number of drugs that can be dispensed at one time.
There are many other responsibilities of a Pharmacy Benefit Manager, such as medication therapy management, which involves working with patients to ensure they take their medications properly and identify and address any potential drug interactions or side effects.
Overall, PBMs are critical in managing prescription drug programs and controlling costs for health plans and employers. While there has been some criticism (and justifiably so) of PBMs for their lack of transparency and potential conflicts of interest, many experts agree that they are an important part of the healthcare system and have helped to reduce prescription drug costs for millions of Americans.
Companies that self-funded their health insurance plan bear the financial risk of their employees' healthcare costs, including prescription drug expenses. It’s critical to partner with a trusted PBM that has your best interests in mind and focuses on helping you control your healthcare costs.
By doing so, you can ensure you're getting the best value for your money and can provide affordable healthcare benefits to your employees.