If you have prescription drug benefits, You might think that you are getting your drugs directly through your insurance plan. However, most plans contract with a pharmacy benefits manager (PBM) to administer prescription benefits. What is a PBM, and what does one do?
As the name implies, a pharmacy benefits manager (PBM) is in charge of administering prescription drug benefits. The ultimate goal of a PBM is to provide plan members with access to a broad spectrum of medically necessary drugs while still keeping costs to a minimum. To achieve this goal, PBMs negotiate drug prices with pharmacies. They also develop the plan formulary, which is a list of drugs covered under the plan. Medications which are not listed on the formulary are not covered. PBMs may also implement cost-containment measures, like requiring prior authorization or documentation from your doctor before a prescription can be filled.
You may notice a name like Medco or Caremark on your insurance card or on correspondence with your insurance company. These are just two of the larger PBMs. Many others work with insurance companies to keep drug costs as low as possible.
Source:
United States Department of Health and Human Services, Health Resources and Services Administration. "Pharmacy Services Support Center Glossary of Pharmacy-Related Terms." Accessed February 29, 2008.
