The Role of PBMs In Your Group Health PLan

While coping with transparency requirements, changing Medicare Part D legislation and consumer-driven health care initiatives, pharmacy benefit managers (PBMs) are playing an ever-increasing role in helping large-scale employers control their prescription drug spend, as well as maximize employee/patient outcomes.

With health care costs typically rising annually at double-digit percentages, most large-scale employers turn to pharmacy benefit managers (PBMs) to help control their prescription drug spend, as well as maximize employee/patient outcomes.

In the traditional PBM/employer relationship, the PBM negotiates discounts, fees and rebates with the retail community, drug manufacturer or wholesaler, and then resells those products and services to an employer client at a different rate.  Typically, the spread between the two, either positive or negative, is what the PBM realizes as income.  Alternatively, in the transparent model, the PBM negotiates the best possible deals, then passes on to the employer all of the discounts and rebates in exchange for an administrative fee that will be his sole revenue source.

PBMs are continuing to deal with transparency expectations, changing legislation, the move toward becoming PDPs and contributing to an overall CDHC approach, and they will become an ever-more-important factor in their clients’ bottom lines.  As PBMs continue to mature, they’ll not just be about benefits management, but good business, too.