Prescription drug prices are a top concern for patients, employers, and policymakers. Many Americans are facing an affordability crisis and high drug prices set by drug manufacturers do not help. The Institute for Clinical and Economic Review (ICER) found in a report that “drug launch prices continue to rise at a rate that exceeds inflation, gross domestic product (GDP) growth, and overall healthcare costs.” Nearly $1.5 billion could have been saved in one year alone if prescription drug prices for 23 drugs that ICER reviewed were priced according to value.

And those prices keep rising. Drug prices have increased an average of 81% for the top 25 most popular brand drugs since they hit the market, some by as much as 873%, according to AARP. 

So how does a breathtakingly expensive drug become affordable for patients?  

Only one part of the health care system spends every day focused on lowering drug costs and protecting patients. That’s the mission of pharmacy benefit managers (PBMs).  

PBMs make high-priced prescription drugs more affordable and accessible by negotiating with drug manufacturers and promoting the use of lower-cost generic and biosimilar options.  

Forty years ago, generic drugs accounted for less than 20% of prescribed drugs; today it’s over 90%. Once generics become available, PBMs make them accessible by placing them on prescription drug formularies, removing the more expensive brand-name drug. 

So, a brand drug with a list price of $1,000 turns into a cheap generic drug, on a formulary, with a $10 copay for patients. In fact, copays on average are now less than $7 for generics for most insured patients. 

By encouraging the use of lower-cost generics and biosimilars, PBMs help ensure patients receive high-quality care at a much lower cost. As David Marin, President and CEO of PCMA, recently told Bloomberg News, “Drug prices are still too high for too many; they’d be a ton higher without PBMs.” 

At their core, PBMs exist to bring down costs for patients and employers. They make positive pharmacy experiences possible and put more money back into the pockets of patients, employers, and taxpayers.