Pharmacy benefit managers (PBMs) have become some of the most influential players in the pharmaceutical supply chain and represent a multi-billion dollar industry. Nearly every employee with health insurance in the United States gets their drug benefits through a PBM, which determines if they receive a brand or generic, how much they pay for their Lipitor and which drug store they get it from. But few have heard of them and most employers have only a basic understanding of how they operate. They can save employers significant dollars, but how exactly, is shrouded by a series of complex negotiations over prices, rebates and discounts. They are a mysterious middleman between the employer, drug makers and pharmacies. It’s a system ripe for abuse and for years their practices have gone unquestioned. But that is changing. This story examines how PBMs operate and looks at the growing demand for transparency among legislators, consumer groups and employers, which is our target audience.
