Have you ever wondered how health plans work? Basically, sponsors provide financial assistance to their beneficiaries so they canbuytheir medicinesat pharmacies. Government programs, self-insured companies, and managed care organizations get assistance from an external source, though.
A pharmacy benefit manager (PBM) is an independent company that works with these sponsors in managing the whole process, including the review of drug utilizationor disease management. In general, their job is to fulfilla corporate health insurance plan that the organizations provide their members.
There are many ways on how PBMs function. Some of these include:
• Processing of pharmacy claims (checking of the patient’s eligibility)
• Setting up of pharmacy benefits
• Managing the negotiations and billing of rebates
• Evaluating for clinical programs
• Establishing connections with retail pharmacies
• Communicating with physicians and patients
• Employing cross pharmacy data for drug-to-drug interactions
• Filling and shipping mail orders
PBMs handle and administerthe medicine benefit program of sponsor organizations, but they’re not doing it without help also. There are individuals called PBM consultants, who help a business understand the expenses behind their solutions and provide advices on how to significantly reduce these costs.
The Competition in the Market Industry
As of 2012 data, there are five large PBMs in the market: Express Scripts (Medco Health Solutions); CVSHealth (formerCVSCaremark); Prime Therapeutics (PBM-owned and ran for a group of state Blue Cross Blue Shield plans); United Health or OptumRx; and Catamaran Corporation (fusion of SXC and Catalyst).
Like every typical business, the PBM industry has a dynamic market competition. While the mentioned large companies are just few in numbers, there far more PBMs out there. They battle out over the large contracts, which provideimmediate turnaround of profits as power players in the drug supply chain.
PBMs are considered one of the lesser known essential companies in the medical industry. Only a few know how these administrators work, contribute, and provide advantages to people under healthcare.