What is the function of a Pharmacy Benefit Manager (PBM)?

The function of a Pharmacy Benefit Manager (PBM) is primarily to control drug prices and manage pharmaceutical care. PBMs act as intermediaries between insurers, pharmacies, and drug manufacturers. Their main goals include negotiating discounts and rebates with drug manufacturers, developing drug formularies that determine which medications are covered by insurance plans, and implementing cost management strategies that help hold drug costs down for both insurers and patients.

By leveraging their buying power, PBMs can significantly influence the cost of medications, thereby making them a critical part of the healthcare system focused on managing pharmaceutical expenditures. This includes crafting policies that aim to ensure that patients have access to necessary medications while also controlling overall healthcare costs. The efficiency and negotiation skills of PBMs lead to reduced prescription drug spending, which is essential in the context of healthcare economics.