Pharmacy Benefit Management (PBM) has extensive influence in the prescription drug industry. A PBM is a company that administers the drug benefit program for your insurance plan. More importantly, they directly affect the costs of your prescription medication. We explain the basics of a PBM, its objectives, and more below. For a more comprehensive view of PBMs, join our upcoming HRx webinar on April 15 with Southern Scripts.
What is Pharmacy Benefit Management, or PBM?
A PBM or pharmacy benefit manager is an intermediary between companies and employers who sponsor health insurance plans, insurance carriers, drug manufacturers and wholesalers, and consumers. Its objectives are to develop pharmacy prescription benefits plan options and to help patients have better access to their medications.
Responsibilities of Pharmacy Benefit Management
PBMs are responsible for an array of things including operating mail order, ensuring patient compliance, and managing distribution. Also, they are responsible for negotiating pricing and processing claims. Moreover, they also manage formularies so individuals are aware of what medications are covered through their health plans.
How Do PBMs Make Money and Who Are the Largest PBMs?
A PBM negotiates with a drug manufacturer to secure a price on a drug and then resells the drug to health insurers at an up-charge or keeps part of a rebate. The largest PBMs include Caremark (CVS Health), Express Scripts (Cigna), and OptumRx (United Health Group).
Learn What Steps to Take to Bend the Prescription Cost Curve
PBMs profit at nearly every stage of the supply chain from the drug manufacturer to the patient purchasing the prescription at the pharmacy. To learn more, register for our April 15th webinar “Pulling Back the Curtain on Pharmacy Benefit Managers.” The CEO of Southern Scripts, LeAnn C. Boyd, will provide an extensive overview of what PBMs are and how plans can leverage the prescription cost curve.