About PPA   |   Sign In   |   Join Now
Pharmacy Benefit Manager Information
Share |

What are PBM's?

Pharmacy Benefit Managers (PBM's) are the administrators of an insurance plan's prescription drug benefit program.  They contract with employers, unions, and insurance companies to administer prescription drug benefit programs, set compensation formulas for pharmacy payments, arrange and collect rebates from manufacturers, establish formularies (preferred drug lists), and determine patient co-payments. In addition, they are the sub-contractor for prescription drugs for the State of Pennsylvania's Medicaid program.  



What is the issue?

Initially established as administrative processors of prescription drug claims for health plans over time PBMs have transformed into major players in the prescription medication world.


Since 1987, when Advance PCS/Caremark (now CVSHealth) became the last of the original "big 3" PBMs to incorporate, the others being Medco and Express Scripts which merged in 2012, total prescription drug expenditures have skyrocketed 1010% and per capita expenditures have increased 756%.


According to a report by Applied Policy, over the past decade, the role of PBMs in the delivery of health care has increased, due to a confluence of factors: coverage expansions under both the Medicare Part D prescription drug benefit and the Affordable Care Act, combined with an increase in prescription drug spending that has motivated commercial health plans and self-insured employers to outsource the management of their spending on outpatient prescription drugs.


As described in an article in The American Prospect, over the past 30 years, PBMs have evolved from paper-pushers to significant controllers of the drug pricing system, a black box understood by almost no one. Lack of transparency, unjustifiable fees, and massive market consolidations have made PBMs among the most profitable corporations you’ve never heard about."


The lack of transparency in the largest PBMs and the lack of meaningful competition negatively affects patients, pharmacists, insurance plans, manufacturers, and ultimately taxpayers who fund government sponsored healthcare programs.


What are the top 10 PBM Reforms Needed NOW?



What is Pennsylvania Doing About the PBM Problem?

Pennsylvania's Auditor General Takes This Issue Seriously!




Click here to view the Auditor General's press release

Click here to view the press release: Auditor General DePasquale Holds Forum on Drug Pricing Transparency

Click here to view the press release: Auditor General DePasquale Initiates Review to Bring Transparency, Accountability to Prescription Drug Pricing. 



SOURCE: http://www.ncpanet.org/advocacy/pbm-resources


PBMs manage pharmacy benefits for over 253 million Americans, according to their trade group. The three largest companies in the PBM industry - Express Scripts, CVS Caremark, and OptumRx - cover more than 180 million lives, or roughly 78% of the market.


As of 2016, the two largest PBMs - CVS Health and Express Scripts - rank on the Fortune 500 list with astonishing revenues of $178 billion and $100 billion respectively.


SOURCE: http://fortune.com/fortune500/list


 Videos on PBMs







Additional Information and Resources on PBM's

Local Lawmaker Looks For More Transparency From Pharmacy Benefit Managers

Two US  Senators request PBM pricing inquiry, citing Pennsylvania and Ohio Medicaid Programs

This Bottle of Pills Costs $20 in One State and $130 in Another - Bloomberg - 1/4/2019


More States, including PA., are taking on pharmacy benefits managers, demanding to see the savings in Medicaid - Catherine Dunn 


The Secret Drug Pricing System - Bloomberg


Ohio Auditor of State Issues PBM Report


Ohio Fires PBMs


Consumer Report on The Shocking Rise of Prescription Drug Prices


Megan Thompson reports on PBMs


Whistleblower files lawsuit against CVS Caremark for falsifying drug prices

Danielle Serino

May 31, 2018


Why CVS Loves ObamaCare

Wall Street Journal

May 30, 2018


Arkansas Healthcare Marketplace Subcommittee Special Meeting on Pharmacy Reimbursements

Arkansas Pharmacists Association

January 31, 2018


How CVS uses its market power to destroy competing independent pharmacies

By David Dayen

The American Prospect

January 23, 2018


Take the Generic, Patients Are Told. Until They Are Not.

By Charles Ornstein and Katie Thomas

New York Times

August 6, 2017

Watch Congress Vent About PBMs on the House Floor
Drug Channels
March 3, 2017




Association Management Software Powered by YourMembership  ::  Legal