Pharmacy benefit managers (PBMs) are third-party administrators that manage prescription drug benefits for health plans, employers, and government programs. They negotiate with drug manufacturers, pharmacies, and other providers to secure discounts and rebates on prescription drugs. PBMs also develop and implement drug formularies, which are lists of preferred drugs that are covered by the health plan.
PBMs play a vital role in the healthcare system by helping to control prescription drug costs. They do this by negotiating lower prices with drug manufacturers and pharmacies, and by implementing drug formularies that encourage the use of generic and lower-cost drugs.
In this article, we will discuss the role of PBMs in the healthcare system, the services they provide, and the challenges they face.
Pharmacy Benefit Manager
Table of Contents
Pharmacy benefit managers (PBMs) are third-party administrators that manage prescription drug benefits for health plans, employers, and government programs.
- Negotiate drug prices
- Develop drug formularies
- Manage pharmacy networks
- Process claims
- Provide customer service
- Control prescription drug costs
PBMs play a vital role in the healthcare system by helping to control prescription drug costs. They do this by negotiating lower prices with drug manufacturers and pharmacies, and by implementing drug formularies that encourage the use of generic and lower-cost drugs.
Negotiate drug prices
One of the most important roles of PBMs is to negotiate drug prices with pharmaceutical manufacturers. PBMs use their purchasing power to negotiate discounts and rebates on behalf of their clients. These discounts and rebates can be passed on to consumers in the form of lower prescription drug costs.
PBMs also negotiate with pharmacies to secure favorable terms and conditions. For example, PBMs may negotiate lower dispensing fees or agree to pay pharmacies a higher reimbursement rate for generic drugs.
The ability of PBMs to negotiate drug prices is a major factor in controlling prescription drug costs. By securing discounts and rebates from drug manufacturers and pharmacies, PBMs can help to keep prescription drug costs affordable for consumers.
In addition to negotiating drug prices, PBMs also develop and implement drug formularies. Formularies are lists of preferred drugs that are covered by the health plan. PBMs use formularies to encourage the use of generic and lower-cost drugs. When a patient fills a prescription for a drug that is not on the formulary, they may have to pay a higher copay or coinsurance.
PBMs play a vital role in the healthcare system by helping to control prescription drug costs. By negotiating lower prices with drug manufacturers and pharmacies, and by implementing drug formularies that encourage the use of generic and lower-cost drugs, PBMs help to keep prescription drug costs affordable for consumers.
Develop drug formularies
Drug formularies are lists of preferred drugs that are covered by a health plan. PBMs develop and implement drug formularies to encourage the use of generic and lower-cost drugs. When a patient fills a prescription for a drug that is not on the formulary, they may have to pay a higher copay or coinsurance.
- Reduce prescription drug costs
By encouraging the use of generic and lower-cost drugs, drug formularies can help to reduce prescription drug costs for consumers.
- Improve quality of care
Drug formularies can also help to improve the quality of care by ensuring that patients have access to the most effective and appropriate medications.
- Promote adherence to medication regimens
By making it more affordable for patients to fill their prescriptions, drug formularies can help to promote adherence to medication regimens.
- Control pharmacy spending
Drug formularies can also help health plans and employers to control pharmacy spending by limiting the use of high-cost drugs.
Drug formularies are an important tool for PBMs to use to control prescription drug costs and improve the quality of care. By carefully selecting the drugs that are included on the formulary, PBMs can help to ensure that patients have access to the most effective and affordable medications.
Manage pharmacy networks
PBMs manage pharmacy networks to ensure that patients have access to a convenient and affordable network of pharmacies. PBMs contract with pharmacies to provide services to their members. These services include dispensing prescriptions, providing customer service, and participating in quality improvement programs.
- Negotiate favorable terms and conditions
PBMs negotiate favorable terms and conditions with pharmacies, such as lower dispensing fees and higher reimbursement rates for generic drugs. These savings can be passed on to consumers in the form of lower prescription drug costs.
- Ensure quality of care
PBMs work with pharmacies to ensure that they are providing high-quality care to patients. This includes monitoring pharmacy performance, conducting quality improvement programs, and providing training to pharmacy staff.
- Provide customer service
PBMs provide customer service to patients, including answering questions about their prescription drug coverage and helping them to find a pharmacy that meets their needs.
- Control pharmacy spending
PBMs can help health plans and employers to control pharmacy spending by managing pharmacy networks and negotiating favorable terms and conditions with pharmacies.
Managing pharmacy networks is an important function of PBMs. By carefully selecting pharmacies to include in their networks and by negotiating favorable terms and conditions, PBMs can help to ensure that patients have access to a convenient and affordable network of pharmacies.
Process claims
PBMs process claims for prescription drugs on behalf of their clients. This includes verifying that the prescription is covered by the patient’s insurance plan, calculating the patient’s copay or coinsurance, and paying the pharmacy for the dispensed medication.
PBMs use sophisticated claims processing systems to automate many of the tasks involved in claims processing. This helps to ensure that claims are processed quickly and accurately.
PBMs also have a team of customer service representatives who are available to answer questions from patients and pharmacies about the claims process.
The claims processing function is a critical part of the PBM business. By processing claims quickly and accurately, PBMs help to ensure that patients have access to the prescription drugs they need.
In addition to processing claims, PBMs also provide a variety of other services to their clients. These services include:
- Negotiating drug prices with pharmaceutical manufacturers
- Developing and implementing drug formularies
- Managing pharmacy networks
- Providing customer service
Provide customer service
PBMs provide customer service to patients, pharmacies, and health plans. This includes answering questions about prescription drug coverage, helping patients to find a pharmacy that meets their needs, and resolving complaints.
PBMs have a team of customer service representatives who are available to answer questions by phone, email, and chat. These representatives are trained to provide accurate and helpful information.
PBMs also provide customer service through their websites. Patients can log in to their online accounts to view their prescription drug coverage, find a pharmacy, and request refills.
PBMs are committed to providing excellent customer service. They understand that patients and pharmacies need to be able to get the help they need quickly and easily.
In addition to providing customer service, PBMs also provide a variety of other services to their clients. These services include:
- Negotiating drug prices with pharmaceutical manufacturers
- Developing and implementing drug formularies
- Managing pharmacy networks
- Processing claims
Control prescription drug costs
PBMs use a variety of strategies to control prescription drug costs, including:
- Negotiating lower prices with drug manufacturers – PBMs use their purchasing power to negotiate discounts and rebates on behalf of their clients.
- Developing and implementing drug formularies – Formularies are lists of preferred drugs that are covered by a health plan. PBMs use formularies to encourage the use of generic and lower-cost drugs.
- Managing pharmacy networks – PBMs contract with pharmacies to provide services to their members. PBMs negotiate favorable terms and conditions with pharmacies, such as lower fees and higher reimbursement rates for generic drugs.
- Processing claims efficiently – PBMs use sophisticated claims processing systems to automate many of the tasks involved in claims processing. This helps to ensure that claims are processed quickly and accurately, which reduces costs.
By using these strategies, PBMs help to control prescription drug costs for their clients. This can lead to lower out-of-pocket costs for patients and lower overall healthcare costs.
FAQ
Here are some frequently asked questions about pharmacy benefit managers (PBMs):
Question 1: What is a PBM?
Answer: A PBM is a third-party administrator that manages prescription drug benefits for health plans, employers, and government programs.
Question 2: What are the benefits of using a PBM?
Answer: PBMs can help to control prescription drug costs, improve the quality of care, promote adherence to medication regimens, and control pharmacy spending.
Question 3: How do PBMs control prescription drug costs?
Answer: PBMs use a variety of strategies to control prescription drug costs, including negotiating lower prices with drug manufacturers, developing and implementing drug formularies, managing pharmacy networks, and processing claims efficiently.
Question 4: How do PBMs improve the quality of care?
Answer: PBMs work with pharmacies to ensure that they are providing high-quality care to patients. This includes monitoring pharmacy performance, conducting quality improvement programs, and providing training to pharmacy staff.
Question 5: How do PBMs promote adherence to medication regimens?
Answer: PBMs can help to promote adherence to medication regimens by making it more affordable for patients to fill their prescriptions.
Question 6: How do PBMs control pharmacy spending?
Answer: PBMs can help health plans and employers to control pharmacy spending by managing pharmacy networks and negotiating favorable terms and conditions with pharmacies.
Question 7: Are PBMs regulated?
Answer: Yes, PBMs are regulated by both the federal and state governments.
These are just a few of the frequently asked questions about PBMs. For more information, please visit the website of the National Association of Pharmacy Benefit Managers (www.napbms.org).
In addition to the information provided in the FAQ, here are a few tips for working with PBMs:
Tips
Here are a few tips for working with PBMs:
Tip 1: Understand your contract
Make sure you understand the terms of your contract with your PBM. This includes the services that will be provided, the fees that will be charged, and the performance guarantees that are in place.
Tip 2: Communicate regularly with your PBM
Maintain open communication with your PBM. This will help to ensure that both parties are on the same page and that any issues can be resolved quickly.
Tip 3: Monitor your PBM’s performance
Track your PBM’s performance to ensure that they are meeting the terms of your contract. This includes monitoring metrics such as drug costs, quality of care, and customer service.
Tip 4: Be prepared to negotiate
Be prepared to negotiate with your PBM if you are not satisfied with their performance. This could involve negotiating lower fees, better terms, or improved performance guarantees.
By following these tips, you can help to ensure that you are getting the most out of your relationship with your PBM.
PBMs can be a valuable partner in helping to control prescription drug costs and improve the quality of care. By understanding the role of PBMs, you can work with them to achieve your goals.
Conclusion
Pharmacy benefit managers (PBMs) are third-party payers that manage pharmacy benefits for health plans, employers, and government programs. They perform a variety of functions, including negotiating drug prices, developing drug formularies, managing pharmacy networks, processing claims, and providing customer service.
PBMs play a vital role in the healthcare system by helping to control costs and improve the quality of care. By negotiating lower drug prices, developing effective drug formularies, and managing pharmacy networks, they help to ensure that patients have access to the medication they need at an affordable price.
In addition to their cost-saving efforts, many public health advocates also praise the role of Pharmacy Benefit Managers, as they can increase patient adherence to their drug regimen through effective formulary management.
As the healthcare system continues to evolve, the role of the PBM will likely become increasingly important. By understanding the role of the PBM and working with them effectively, health plans, employers, and government programs can help to ensure that patients have access to the best possible care at the lowest possible cost.
For more information on pharmacy benefit managers, please visit the website of the National Association of Pharmacy Benefit Managers (www.napbms.org).