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Understanding How Your PBM Works

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Pharmacy Benefits ManagersPharmacy benefits managers or PBMs provide an important service. Almost 225 million Americans use them. Some of the clients that PBMs offer their services to include managed care organizations, government agencies both state and federal, and self-funded employers.

PBMs work with their clients to come up with decisions on what kind of benefits the clients need. These benefits include pharmacy network, drugs that will be covered, and a beneficiary’s requirements on cost sharing. The PBM’s job doesn’t end there, though, as the client has to retain the PBM to administer the benefit for the client’s employees or members.

Most clients retain the services of a pharmacy benefits manager because the PBM can lower the expenses involved in offering a pharmacy benefit. A PBM can negotiate discounts on drugs or ingredients cost as they are called. They may also manage the use of a drug and automate the involved administrative services.

As this kind of setup may prove too complicated for many people, it has led to the rise of another industry surrounding pharmacy benefits management. This is the industry responsible for giving people a consultant on PBM. This person’s job is to help ensure clients get a solid explanation and auditing of what they’re paying for. These people do not offer pharmacy benefits management themselves; they help clients understand their PBM so clients can save more money.

To ensure you are getting the most out of your PBM, demand a contract with them. Even if this is not possible (as in some cases) you can still protect yourself via a full pass-through of network and mail-order pricing. Your consultant may be able to give you reference pricing so you know if you’re getting a fair deal with your PBM.

Your contract should give you rights to all PBM network pharmacy contracts as well as other services such as manufacturer rebates, criteria for clinical coverage, etc. The more you know the better.

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