| Pharmacy Benefit Managers: A Five-Part Info Series|
Welcome to our five-part email series about Pharmacy Benefit Managers (PBMs). Throughout the next few weeks we’ll cover topics ranging from what PBMs are to the way they affect your ability to provide healthcare to patients, and ways to help fight back against the limitations placed by PBM’s within the system.
What is a PBM?Providers and patients alike are familiar with how convoluted the healthcare system is in the United States, but many are unaware of the middlemen who play a major role in dictating access to which therapies, and at which prices patients can access them. These players are known as Pharmacy Benefit Managers, whose intended role is to reduce administrative costs for insurers, validate a patient’s eligibility, administer plan benefits, and negotiate costs between pharmacies and health plans. Within this role, the biggest oversight PBM’s have, according to the National Community Pharmacists Association (NCPA), is of “virtually every aspect of one of the most critical and costly aspects of the health insurance benefit – prescription drugs.”As a third-party administrator of prescription drug programs, PBM’s are primarily responsible for processing and paying prescription drug claims. They also typically negotiate discounts and rebates with drug manufacturers, contract with pharmacies, and develop and maintain the drug formulary – a list of prescription drugs covered by a prescription drug plan. Basically, this means that PBM’s are the ones who dictate which drugs can be prescribed and sold to patients, and at which costs, depending on their negotiations with manufacturers, insurers, and pharmacies. As of 2022, PBM’s control approximately 89% of the market and serve about 270 million Americans, according to The National Association of Insurance Commissioners (NAIC).The PBM role was created, in theory, as a means for patients to be able to access needed therapies at the best possible price, while also assuaging some of the workload of insurance companies and providers. On paper, they seem like a win-win, however, there’s a lot more going on behind the scenes. We hope you’ll follow along over the next few weeks as we delve further into the simultaneously ubiquitous but mysterious PBM’s. Our aim is to provide information and tools to help debunk the mystery and work toward reform and regulation.
Role of Pharmacy Benefit Managers (via The Commonwealth Fund)
For further information on the origin of PBM’s and their intended purpose, check out the following articles:
What is a pharmacy benefit manager and what do they do?Role of Pharmacy Benefit Managers in the Pharmaceutical Supply Chain