What is the primary role of a pharmacy benefit manager (PBM)?

The primary role of a pharmacy benefit manager (PBM) is to negotiate drug prices with manufacturers. PBMs act as intermediaries between health insurers, pharmacies, and drug manufacturers. They are responsible for managing prescription drug benefits on behalf of health plans. This involves negotiating discounts and rebates with pharmaceutical companies, which helps to lower costs for both the health plan and the end consumers.

Through their negotiation efforts, PBMs can influence drug formulary decisions, determining which medications will be covered and at what tier (which can significantly affect patient out-of-pocket costs). By ensuring favorable pricing, PBMs help health plans manage their drug costs while providing access to necessary medications for patients. Their role is crucial in the overall management of pharmacy benefits within health insurance plans, making them key players in the healthcare system.