The operations of Pharmacy Benefit Managers (PBMs) are often perceived as opaque, but this section aims to clarify their functions and address common misconceptions.

Myth 1: PBMs Operate in Secret

While PBMs work within complex healthcare networks, they are not the clandestine entities some believe them to be. In fact, their negotiations and methods are documented and analyzed extensively in healthcare literature. The contracts they secure with drug manufacturers and pharmacies are confidential to protect competitive pricing but are aligned with industry standards and regulatory requirements.

Myth 2: PBMs Increase Drug Prices

It's a common misunderstanding that PBMs drive up drug prices. However, their core function is to negotiate lower prices for payers and consumers. By leveraging bulk purchasing and competitive bidding among manufacturers, they can secure significant discounts and rebates, which can be passed on to payers and consumers.

Myth 3: PBMs Provide No Real Value

PBMs are sometimes seen as unnecessary middlemen who add to the cost of healthcare without providing tangible benefits. On the contrary, PBMs offer essential services such as formulary management, drug utilization review, and disease management programs, which improve patient outcomes and contribute to cost containment.

Myth 4: PBMs' Practices are Unregulated

There's a belief that PBMs operate without oversight, but they are regulated at both federal and state levels. They are subject to laws and regulations that govern their practices, including transparency in their dealings and maintaining the confidentiality of patient information.

Myth 5: PBMs Work Solely for Profit

While PBMs are for-profit entities, their business model is designed to align their success with the cost savings they generate for their clients. Their profits are derived from the efficiencies and savings they create within the pharmaceutical supply chain.

In shedding light on these myths, we aim to provide a clearer picture of PBMs' role in healthcare: they are key players in managing prescription drug benefits, focused on negotiating better prices and improving care, all while operating within a regulated environment.

Learn more about PBMs

How PBMs lower costs

PBMs negotiate directly with drug manufacturers and pharmacies, utilizing formulary development, contracting tools, and bargaining power to reduce drug costs.

What are PBMs?

PBMs are companies that manage prescription drug benefits by negotiating directly with drug manufacturers and pharmacies. Their goals are to reduce drug costs and improve convenience and safety for consumers, health plans, and employers.

Expert Insights

Research from experts such as Dr. Lawton Robert Burns shows that PBMs play an integral role in the healthcare system by managing costs and preserving the sustainability of health benefits.