What is a PBM?

Pharmacy Benefit Managers (PBMs) are your advocates in the health care system, working to lower prescription drug costs for patients and payers across the country.

PBMs administer prescription drug plans for more than 270 million Americans who have health insurance from a variety of sponsors including: commercial health plans, self-insured employer plans, union plans, Medicare Part D plans, the Federal Employees Health Benefits Program (FEHBP), state government employee plans, managed Medicaid plans, and others.

Health plans began establishing PBMs more than two decades ago to negotiate lower prescription drug prices for patients and payers.

Today, health care plans hire PBMs to secure lower costs for prescription drugs, passing the savings directly to patients. PBMs are your first line of defense against rising prescription drug costs. They work to ensure lower costs and better health outcomes through affordable access to medicines you need.

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PBM Savings

Virtually all – 99.6% of prescription drug rebates PBMs negotiated with drug manufacturers in Medicare Part D are passed through to drug plan sponsors and used to lower costs for Medicare beneficiaries, according to the U.S. Government Accountability Office (GAO). {Read More}

PBMs are projected to save employers, unions, government programs, and consumers $654 billion – up to 30 percent –on drug benefit costs over the next decade.

PBMs save payers and patients 40 to 50% on prescription drug and related medical costs, compared to what they would spend without PBMs.

PBM Value

PBMs reduce drug costs by:

  • Offering home delivery of medications and creating select networks of more affordable pharmacies;
  • Encouraging the use of generics and more affordable brand medications;
  • Negotiating rebates from drug manufacturers and discounts from drugstores;
  • Managing high-cost specialty medications; and
  • Reducing waste and improving adherence.
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