What is a Pharmacy Benefit Manager (PBM)?
Pharmacy Benefits Managers also referred to as PBMs, are third-party administrators of prescription-drug programs for payers, such as private insurers, and Medicare Part D plans.
PBMs act as a bridge between employers and their members, the drug manufacturers, pharmacies, and other health-related entities in the marketplace working to facilitate the best possible health outcomes at the lowest costs. Having a successful pharmacy benefit strategy and choosing the right PBM to meet an employer’s needs is critical to ensuring the success of a benefits plan, mitigating spend, and protecting the well-being of employees and their dependents.
What Functions do PBMs perform?
PBMs operate in the middle of the distribution chain for prescription drugs. PBMs objectives include:
- Adjudication of pharmacy claims
- Pharmacy network contracting, payment, and auditing
- Mail order and specialty pharmacy access and administration
- Rebate contracting, administration, and payments
- Formulary or preferred drug list development and maintenance including establishing clinical editing, such as quantity limits, step therapies, prior authorization, and more
- Clinical program management for adherence, duplicate therapy, opioid overutilization prevention, disease management, and other similar types of services
- Member services, including a call center to answer employee and dependent questions and lend assistance with utilizing the pharmacy benefit
- Reporting of overall pharmacy program metrics, trends, and statistics
- Support appeals and grievances
- Communications to members, pharmacies, and physicians to help educate, assist with decisions to drive to lower-cost alternatives and to bring overall awareness to help provide better health outcomes for the members
- Assistance with compliance of State and Federal regulations
PBMs play a large role in assisting payers with effectively managing the overall pharmacy benefits program and obtaining the most value within these programs.
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