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Pharmacy Benefit Manager (PBM)

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Updated December 20, 2009

Definition:

A Pharmacy benefit manager (PBM) is a company that administers, or handles, the drug benefit program for your employer or health plan.

PBMs process and pay prescription drug claims and are responsible for creating and updating your health plan’s drug formulary.

Since these companies can buy medications in large quantities directly from the drug companies, they are able to offer you discounts on mail order medications.

Also Known As: PBMs
Examples:
The largest PBMs in the country are Medco, Caremark, and Express Scripts. These companies provide mail-order drugs to more than 100 million people.

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