Pharmacy benefit management

In the United States, a 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.[1][2] According to the American Pharmacists Association, "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."[3][4] PBMs operate inside of integrated healthcare systems (e.g., Kaiser Permanente or Veterans Health Administration), as part of retail pharmacies (e.g., CVS Pharmacy), and as part of insurance companies (e.g., UnitedHealth Group).[1][4]

As of 2016, PBMs managed pharmacy benefits for 266 million Americans. In 2017, the largest PBMs had higher revenue than the largest pharmaceutical manufacturers, indicating their increasingly large role in healthcare in the United States.[5] However, in 2016 there were fewer than 30 major PBM companies in this category in the US,[1] and three major PBMs (Express Scripts, CVS Caremark, and OptumRx of UnitedHealth Group) comprise 78% of the market and cover 180 million enrollees.[1][6]

  1. ^ a b c d Feldman, Brian S. (March 17, 2016). "Big pharmacies are dismantling the industry that keeps US drug costs even sort-of under control". Quartz. Retrieved March 29, 2016.
  2. ^ Gryta, Thomas. "What is a 'Pharmacy Benefit Manager?'". Wall Street Journal. ISSN 0099-9660. Retrieved March 29, 2016.
  3. ^ "Pharmacy Benefit Management" (PDF). American Pharmacists Association. July 9, 2009. Retrieved November 4, 2015.
  4. ^ a b Danzon, Patricia (June 29, 2014). "2014 ERISA Advisory Council: PBM Compensation and Fee Disclosure" (PDF). Retrieved March 29, 2016.
  5. ^ Schulman, Kevin A.; Richman, Barak D. (2018). "The Evolving Pharmaceutical Benefits Market". JAMA. 319 (22): 2269–2270. doi:10.1001/jama.2018.4269. ISSN 0098-7484. PMID 29625496. S2CID 4655676.
  6. ^ Balto, David A. (November 17, 2015). "The State of Competition in the Pharmacy Benefits Manager and Pharmacy Marketplaces" (PDF). House Judiciary Subcommittee on Regulatory Reform, Commercial, and Antitrust Law. Retrieved March 29, 2016.