Pharmacy Benefit Managers, or PBMs, are largely unrecognized by most employees and even many employers, but they have a tremendous impact on U.S. health care decision-making.

For example, the top three PBMs control 80% of the market.1 CVS Caremark, the PBM for CVS, is the second largest PBM in the U.S., accounting for nearly 33% of covered lives.2 This significant market share allows CVS Caremark (as well as the other largest PBMs) to exercise undue market leverage and generate outsized profits for themselves.

PBMs determine which pharmacies will be included in a prescription drug plan's network and how much said pharmacies will be paid for their services. Some entice plan sponsors to require plan beneficiaries to use a mail order pharmacy – often one owned and operated by the PBM – for certain medications. They also determine which medications will be covered by the plan or plan formulary, and drug manufacturers often pay “rebates” to PBMs to get their drugs onto those formularies. While their role goes largely unnoticed, the nontransparent nature of the traditional PBM business model can add hidden costs and lead to higher prices.

"Expansions of prescription drug coverage over the past 10 years mean that PBMs are involved in a majority of prescription drug transactions today. In light of that fact, transparency regarding the PBM industry is needed so that purchasers of these services in both in the commercial and government sectors can make well-informed decisions." – Applied Policy® Report

Download examples of mail order waste - Waste Not, Want not.

And finally, check out our PBM Toolkit and list of recent media articles related to PBMs.

• The Costs of Mail Order Rx

• PBM Business Practices One Pagers

• DIR INFOGRAPHIC 1: How Pharmacy DIR Fees Work

• DIR INFOGRAPHIC 2: How Retroactive Pharmacy DIR Fees Hurt Medicare Patients & Taxpayers

• One pager: Meaningful PBM Reform Does Not Raise Costs

• One pager: Controlling PBM Conflicts of Interest Does Not Raise Healthcare Costs