Pharmacy Benefit Management Companies: Do They Create Value in the US Healthcare System?
Alan Lyles ()
Additional contact information
Alan Lyles: University of Baltimore
PharmacoEconomics, 2017, vol. 35, issue 5, 493-500
Abstract Pharmacy benefit management companies (PBMs) perform functions in the US market-based healthcare system that may be performed by public agencies or quasi-public institutions in other nations. By aggregating lives covered under their many individual contracts with payers, PBMs have formidable negotiating power. They influence pharmaceutical insurance coverage, design the terms of coverage in a plan’s drug benefit, and create competition among providers for inclusion in a plan’s network. PBMs have, through intermediation, the potential to secure lower drug prices and to improve rational prescribing. Whether these potential outcomes are realized within the relevant budget is a function of the healthcare system and the interaction of benefit design and clinical processes—not just individually vetted components. Efficiencies and values achieved in price discounts and cost sharing can be nullified if there is irrational prescribing (over-utilization, under-utilization and mis-utilization), variable patient adherence to medication regimens, ineffective formulary processes, or fraud, waste and abuse. Rising prescription drug costs and the increasing prevalence of ‘high deductible health plans’, which require much greater patient out-of-pocket costs, is creating a crisis for PBM efforts towards an affordable pharmacy benefit. Since PBM rebate and incentive contracts are opaque to the public, whether they add value by restraining higher drug prices or benefit from them is debatable.
Keywords: Cost Sharing; Retail Pharmacy; Pharmacy Benefit; Benefit Design; Pharmaceutical Prex (search for similar items in EconPapers)
References: View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s40273-017-0489-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:spr:pharme:v:35:y:2017:i:5:d:10.1007_s40273-017-0489-1
Ordering information: This journal article can be ordered from
Access Statistics for this article
PharmacoEconomics is currently edited by Timothy Wrightson and Christopher I. Carswell
More articles in PharmacoEconomics from Springer
Series data maintained by Sonal Shukla ().