What Clients Should Know about PBMs

·        PBMs process pharmacy claims for their clients.

·        PBMs handle payment for pharmacy services.

·        PBMs provide clients with claims data and analysis by building report packages.

·        PBMs negotiate, collect and distribute rebates from drug manufacturers because they create competition among manufacturers for preferred drug status.

·        PBMs provide guidance on co-pay structure to promote use of less expensive drugs.

·        PBMs use several “spread” games to hide income thus enabling them to lower administration fees and become more competitive in the market.

·        PBMs lead the client to believe that what is paid to the PBM is the same amount reimbursed to the pharmacy.

·        PBMs keep rebates in lieu of administration fees and have the drug manufacturer re-classify rebates using categories such as education grants, research, advertising, promotion, access fees, formulary management fees, & data collection fees.

·        Clients should request their PBM to report the “per member per month (PMPM) cost.”  This figure is calculated by dividing the total amount of drug cost spent in a month by the number of members enrolled in the program.  The PMPM cannot be manipulated and is a true reflection of whether the plan’s cost has increased or decreased.