Pharmacy benefit manager

Pharmacy Benefit Manager (PBM) is a third-party administrator of prescription drug programs for commercial health plans, self-insured employer plans, Medicare Part D plans, the Federal Employees Health Benefits Program, and state government employee plans. PBMs are primarily responsible for developing and maintaining the formulary, contracting with pharmacies, negotiating discounts and rebates with drug manufacturers, and processing and paying prescription drug claims.

History

The concept of a PBM originated in the early 1960s with the establishment of Pharmaceutical Card System Inc. by a group of independent pharmacies in Washington D.C. The primary goal was to provide a cost-effective prescription drug benefit to employer groups in the area. Over the years, the role of PBMs has evolved and expanded, becoming an integral part of the healthcare system in the United States.

Role and Functions

PBMs play a crucial role in the healthcare system by managing and administering prescription drug benefits. They negotiate with drug manufacturers and pharmacies to secure lower drug costs and pass these savings onto health plans and their members. PBMs also develop and maintain formularies, which are lists of preferred drugs covered by a health plan. In addition, they process and pay prescription drug claims, provide specialty pharmacy services, and offer patient care services such as medication therapy management.

Criticisms and Controversies

Despite their significant role in the healthcare system, PBMs have been the subject of numerous criticisms and controversies. These include concerns about transparency, conflicts of interest, and the impact of PBM practices on drug prices and patient access to medications. In recent years, there have been calls for increased regulation and oversight of PBMs to address these issues.

See Also

• Healthcare in the United States
• Prescription Drug
• Medicare Part D
• Health Insurance

References

Pharmacy benefit manager Resources
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