Should you use a PBM?

by | May 19, 2022 | Benefits

What is the Role of Pharmacy Benefit Managers (PBMs)?

Pharmacy benefit managers (PBMs) are paid, third-party administrators of prescription drug coverage for insurance plans and employers. PBMs can provide a vast array of services including processing claims, negotiating discounts & rebates between payers and manufacturers, and developing/maintaining formularies (a list of prescription drugs covered by a plan).

PBMs manage plans for commercial health plans, self-insured employer plans, state government employee plans, Medicaid managed care organization (MCO) and Medicare Part D plans. 

What are the benefits to having a PBM?

PBMs can increase access to specific medications employees need at a discounted rate. The goal of a PBM is work as a go between with the employer and manufacturer to ensure both get a fair deal typically offering a solution to minimize prescription benefit costs. They can adjust the formulary on your plan to be more of a custom fit for your employees so they can have access to medications needed at a negotiated lower price than a health plan alone. 

PBMs have extensive relationships with a large network of retail and mail-based pharmacies which can offer employees/employers greater access to medications from multiple sources.

PBMs also can help implement several programs into your pharmacy plan that help reduce overall prescription costs and improper prescribing.

For example, Step Therapy programs help ensure patients have tried a less expensive drug that’s proven effective for a specific condition, before moving onto a more expensive drug. This can save the employer and the employee money; and leads to greater compliance as the patient can more easily afford the medication.

Prior Authorization programs are designed to prevent improper prescribing or the improper use/abuse of certain drugs. This not only prevents unnecessary expenses, but it also protects the safety of patients.  PBMs can help implement other programs designed to improve health outcomes for your employees focused on reducing waste and increasing adherence, managing high cost, specialty medications, and clinical drug management. **


How do PBMs work with employers?

An employer will sign a contract with a PBM to design and maintain a prescription benefits plan. Typically, this is a 3-year contract and the employer and PBM work together (sometimes a broker can be involved) to build an ideal pharmacy benefit plan by selecting deductibles, co-payments, co-insurances, and clinical programs.

Once the plan is in place, the employer relies on the PBM to administer the prescription benefits, and to educate their employees about their coverage. Most PBMs also offer call centers, websites or apps that offer easy access to information about eligibility, refills, pricing, and coverage rules.

Premier Workforce Solutions can take a 360 degree view of your employee benefits package and help mitigate costs without compromising quality. Implementing a PBM is one effective way to mitigate prescription drug costs for both employers and employees.