Pharmacy Benefit Manager (PBM) Learning Resources – Pharmacist Consult

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Pharmacy benefit managers (PBMs) are entities that manage prescription drug benefits on behalf of health insurance plans. PBMs, thus, can be considered as extensions of health insurance plans. This oversight can include commercial health plans, self-insured employer health plans, Medicare Part D plans, union plans, state government employee plans, managed Medicaid plans, and so on. 

PBMs essentially can touch all aspects of the health insurance industry as it relates to medications. When thinking of the general pharmacy ecosystem, PBMs serve as a middle player between drug manufacturers, health insurance plans, and pharmacies. PBMs have frequent interactions with all three of these entities. 

PBMs were established to help increase the efficiency of health insurance plans while concurrently lowering costs for both health insurance plans and plan enrollees. However, PBMs commonly are the recipients of negative attention from common media outlets. Given the stark polarity that PBMs can evoke, this article is meant to be a neutral discussion that serves as an introductory dialogue that describes the roles that PBMs are intended to serve. 

PBMs have a variety of primary core functions:

  • Prescription adjudication services at pharmacies (see Table 2)
  • Formulary management services for health insurance plans (see Table 2)
  • Utilization management services for health insurance plans (see Table 2)
  • Provide mail order prescription services for health insurance plans 
  • Negotiate rebates with drug manufacturers to pass cost savings onto health insurance plans and plan enrollees
  • Negotiate discounts with drug manufacturers to pass cost savings onto health insurance plans and plan enrollees 
  • Help to reduce waste while improving patient adherence 

For individuals interested in gaining an introductory knowledge about PBMs and what their roles are, there are four resources listed below to help further delve into this topic:

  1. Illustration 1: Where PBMs Fit in the Pharmacy Ecosystem
  2. Table 1: Tertiary Resources to Utilize (Stratified by Bias Type)
  3. Table 2: PBM Introductory Terminology
  4. Table 3: List of Major United States PBMs

Illustration 1: Where PBMs Fit in the Pharmacy Ecosystem

Image Source: Elizabeth Seeley and Aaron S. Kesselheim, Pharmacy Benefit Managers: Practices, Controversies, and What Lies Ahead (Commonwealth Fund, Mar. 2019). https://doi.org/10.26099/n60j-0886

Illustration 1 is an oversimplified concept map that demonstrates the basics of how a PBM is the intermediary player between drug manufacturers, health insurance plans, and pharmacies. Many other concept maps are available that are increased in complexity and provide a more thorough overview of how funds and services are distributed amongst the players in the map above. 

Table 1: Tertiary Resources to Utilize (Stratified by Bias Type)*

*Not an all-inclusive list

Table 1 describes a sampling of resources to utilize when conducting preliminary research about what a PBM entails. As the topics of PBMs are polarizing in nature due to government and media profiles of them, it is helpful to read through a variety of different resources that are written from varying perspectives. By reading through a combination of neutral, negative, and positive perspectives, a learner can begin to form their own opinions of PBMs based on published evidence. 

Table 2: PBM Introductory Terminology*

*Not an all-inclusive list

There are many terms that are utilized in PBM-related discussions. A bulk of the baseline terms that are utilized are included in Table 2. However, other resources external to Pharmacist Consult describe additional terms that are increased in complexity from what is mentioned above. But, these terms may be outside of the purview of everyday individuals and may be more relevant for healthcare professionals. 

Table 3: List of Major United States PBMs*

*Not an all-inclusive list

There are a plethora of PBMs that operate in the United States. However, the top 4 are listed within Table 3. CVS Caremark, Express Scripts, and OptumRx account for more than 80% of prescription claims in the United States; the top 6 PBMs handle more than 95% of them.  

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