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.

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Major Findings

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.