What is a Pharmacy Benefits Manager (PBM)?

Americans spend more on prescription drugs than anyone else in the world, with average costs around $1,200 per person per year. As the cost of prescription drugs continues to rise, we're working to make them more affordable whether you have insurance or not. To do this, we partner with pharmacy benefit managers. Read on to find out what role pharmacy benefit managers play in the pharmaceutical world.

What do Pharmacy Benefit Managers (PBMs) do?

Pharmacy benefit managers help manage drug benefits for Americans with (and sometimes without) insurance or Medicare. Your health insurer almost always connects with a PBM to provide you with your benefits, whether or not you see their name on your insurance card.

Pharmacy Benefit Managers have two main purposes:

1. Organized Pharmacy Prescription Drug Plan Options

2. Help patients achieve better health outcomes through increased access to appropriate medications. To do this, PBMs work with drug manufacturers, wholesalers, pharmacies and plan sponsors.

How does PBM offer us pharmaceutical discounts?

To obtain discounts, Pharmacy Benefit Managers maintain relationships with the following:

• Drug Manufacturers: The Pharmacy Benefits Manager negotiates the price of a prescription drug and the manufacturer's rebates. PBMs will list certain drugs on drug formularies in exchange for discounts, which will bring business to the drugmaker.

• Health Payer: The PBM manages the payor's drug formulary (i.e. drugs for which plan beneficiaries may be covered). In exchange, the payer gives money to the PBM for administrative services, payment for the drug itself, and distribution of the drug. Drug reimbursements that PBM obtains from the manufacturer should be considered in the lump sum owed by the payer.

• Pharmacies: In some cases, a PBM will contract with a pharmacy to dispense drugs directly. They will also pay the pharmacy a drug dispensing fee.

What are the main responsibilities of PBMS?

Maintain drug formulary lists - Pharmacy benefit managers also manage and maintain formulary lists. A medication formulary or medication list is a list of prescription medications preferred by a specific health plan. They are essential for understanding health care benefits and the type of care a beneficiary can access. If a patient is prescribed a drug that is not listed on their health plan formulary, they will pay the full cost out of pocket or their provider must choose another drug that is listed on the plan formulary.

Negotiate drug prices and manage reimbursements – Pharmacy benefits managers also negotiate drug costs when purchasing from prescription drug manufacturers. Drug manufacturers are responsible for setting the list price of their prescription drugs; this is rarely the price a PBM pays for the drug.

What are Rebates?

Since drug manufacturers know that PBMs are responsible for creating drug lists, they would like to work with PBMs to get their drugs (especially expensive ones) on their list. To do this, they often reimburse a PBM. The PBM will need to negotiate payment for a medicine below the list price. From there, PBM receives reimbursements from its paying partners while paying a drug dispensing and management fee to pharmacies.

As the healthcare industry continues to focus on the rising cost of healthcare and prescription drugs, the role of pharmacy benefit managers and how they work with payers and drug manufacturers will continue to be important. . These intermediaries play a critical role in setting prescription drug prices and as such have a significant effect on healthcare expenditures, patient drug costs, and ultimately affordability and availability. access to medicines, including the discounts we give you!