A pharmacy benefits manager (PBM) is a third-party administrator (TPA) of prescription drug programs. PBMs are contracted by organizations to provide prescription drug benefit management for their employees.

The cost of prescriptions is the fastest growing segment of healthcare cost in the United States, faster than hospital and physician costs combined. The NIH and GAO estimate that in 2021, prescription drug expenditures in the United Stated were approximately $576.9 billion, representing roughly 17.5% of the overall dollars spent on personal healthcare services. This is up from roughly 7% in the 1990’s.

  • Provide Zero dollar Generic Prescriptions

  • Processing plan member prescription claims

  • Negotiating drug prices with drug companies and pharmacy networks

  • Administering mail order and specialty pharmacy channels and claims

  • Leverage tools to encourage the use of generics and affordable brands

  • Performing drug utilization analysis and reviews

  • Developing and managing formularies (a list of preferred drugs covered under a plan)

  • Managing high-cost specialty medications for patients with complex conditions

  • Implement programs to ensure patient compliance

Benefits to working with a PBM

Cost Savings

PBMs can reduce costs by negotiating discounts with pharmacies and offering cost effective options such as mail order fulfillment. PBMs steer plan participants to more cost effective drugs through the use of a formulary.

Information & Insights

Employers have access to reports providing drug utilization information which aids in reducing waste and supporting patient adherence to the prescribed drug regimens.


PBMs make staying current with changes in the field of prescription drugs easy by keeping employers informed of industry changes in pricing, safety, efficacy and much more.