February 4, 2016
Pharmacy Benefit Managers (PBMs) now implement prescription drug benefits for some 266 million Americans who have health insurance from a variety of sponsors: commercial health plans, self-insured employer plans, union plans, Medicare Part D plans, the Federal Employees Health Benefits Program, state government employee plans, managed Medicaid plans, and others.
PBM tools focus on six primary areas to produce savings:
- Negotiating rebates from drug manufacturers
- Negotiating discounts from drugstores
- Offering more affordable pharmacy channels
- Encouraging use of generics and affordable brands
- Reducing waste and improving adherence
- Managing high-cost specialty medications
PBMs: Lowering Drug Benefit Costs by $654 Billion over the Next Decade
From 2016 to 2025, the use of PBM tools will save employers, unions, government programs, and consumers $654 billion—or up to 30%—compared with programs that make little use of proven PBM tools. The breakdown in total savings includes:
- Commercial plan sponsors and their members will save nearly $350 billion;
- Medicare Part D and its beneficiaries will save nearly $257 billion; and
- Managed Medicaid plans will save nearly $48 billion.