Pharmacy Benefit Managers

What is a Pharmacy Benefit Manager (PBM) and how do they work?

Pharmacy Benefit Managers

Pharmacy benefit managers (PBMs) act as a drug broker between the pharmacies that fill the prescriptions and the payers who typically fund much of the drug benefit.

PBMs work by charging their clients a discounted price over the retail price of a prescription. They then pay the pharmacies a lower price and keep the difference. The industry term is "spread". PBMs also receive money back from manufacturers in the form of "rebates." Rebates are payments made by manufacturers to PBMs for inclusion of their drugs into the PBM's formulary or list of acceptable drugs.

You can download the complete legislative document below.