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.

View the full report.

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.