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What is a “pharmacy benefit manager,” or “PBM?” |
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A “pharmacy benefit manager,” or “PBM,” is a large company that administers prescription benefit programs for HMOs, employers, unions, preferred provider organizations and other health plans. PBMs also develop drug “formularies,” lists of medicines that PBMs use to manage drug spending. By charging less for certain brands of drugs, PBM formularies steer healthcare consumers and their physicians into using particular drugs for particular therapeutic needs. The consumer pays a higher co-pay (and the health plan pays the PBM more) for drugs that are not in the “preferred” category on the PBM’s formulary. The health plan may provide no coverage for drugs that are not on the list. |
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