The Role of Pharmacy Benefit Managers in US Healthcare

This white paper describes the role of pharmacy benefit managers (PBMs) in the US healthcare system, detailing their administration of prescription drug benefits for over 275 million individuals. The document outlines how PBMs negotiate services with various plan sponsors, including commercial health plans and Medicare, influencing healthcare costs and health outcomes through formulary design and utilization management. It presents evidence from literature indicating that PBM-led programs can enhance medication adherence and reduce hospital admissions. Additionally, the paper discusses recent scrutiny of PBMs by policymakers and regulators, highlighting ongoing legislative efforts aimed at reforming PBM practices. Despite criticisms regarding drug costs and access, the paper argues that PBMs can improve medication affordability and access through effective cost management. The methodology section details a literature review conducted to assess the evolving role of PBMs, providing a historical context and insights into their impact on drug pricing and healthcare delivery.