What is a PBM in healthcare?

Pharmacy Benefit Manager (PBM) Defined PBMs are third-party administrators contracted by health plans, large employers, unions and government entities to manage prescription drug benefits programs. They were created in the 1960s to process claims for insurance companies.

What is the role of a PBM?

PBMs have two main objectives: to curate pharmacy prescription benefits plan options; and to help patients achieve better health outcomes through greater access to appropriate medications. To do this, PBMs work with drug manufacturers, wholesalers, pharmacies, and plan sponsors.

How does a PBM make money?

In addition to monetizing prescriptions themselves, PBMs also gain profits through administrative and dispensing fees, rebates, group purchasing organizations, research grants, sale of claims data, prior authorizations, and valued added programs.

Do we need PBMs?

Today, health care plans hire PBMs to secure lower costs for prescription drugs, passing the savings directly to patients. PBMs are your first line of defense against rising prescription drug costs. They work to ensure lower costs and better health outcomes through affordable access to medicines you need.

What are the top 3 PBMs?

The video is excerpted from my recent Patients, Payers, and PBMs webinar. Depending on your role in the drug channel, you may or may not find these data terrifying. The market share chart shown below comes from our new 2021 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.

What’s wrong with PBMs?

Although the primary function of a PBM initially was simply to create networks and process pharmaceutical claims, these entities have exploited the lack of transparency and created conflicts of interest which have significantly distorted competition, reduced choices for consumers and ultimately increased the cost of …