• Pharmacy Benefit Management

    What is Pharmacy Benefit Management and How Does it Work?

    • Vision Sensors Magazine
    • In Vision
    • 3 March 2016

    Pharmacy Benefit ManagementThe healthcare system is one of the most complex social infrastructures. With the rising costs of specialized healthcare, along with a matching increase in the cost of therapeutic and diagnostic modalities, it is not practical to get sick. If there is only a way to reduce the instances of being sick and increase the sources that can provide help, then healthcare services will truly be for all. Of course, you know that is quite impossible.

    Pharmacy Benefit Management

    There is, however, a growing industry within the healthcare industry that functions as a middleman between healthcare consumers and the rest of the healthcare system—particularly those in the pharmaceutical industry. Known as Pharmacy Benefit Management (PBM), this calls for securing drugs from pharmaceutical manufacturers at a much lower cost for the benefit of pharmacies, dispensaries, hospitals, insurance companies, and dispensing physicians.

    The prevailing cost of a drug direct from a manufacturer is $1,000 per 100, for example, PBMs can secure discounts or even rebates to lower the cost to $800 per 100. The PBM company can then choose to pass the drug to the insurance company, a pharmacy, or whoever has employed their services at $900 per 100. The $100 is taken as administrative fee for the PBM company.

    As the entire concept of PBM is quite tricky, people who use PBMs can seek advice from pharmacy benefit consultants for more information, says crystalclearrx.com.

    What Other Services do PBM Companies Provide?

    Pharmacy Benefit Management companies serve many functions, but often as an intermediary between providers and recipients. PBMs also process and analyze prescription claims, while initiating contracts with pharmacy networks. Additionally, PBM companies negotiate rebate agreements with pharmaceutical manufacturers.

    Pharmacy Benefit Management companies develop and manage formularies as well as maintain pharmaceutical treatment programs to ensure patient compliance. They also operate mail order pharmacies, including manage mail order claims. They perform drug utilization reviews to help the medical community find the effectiveness of certain therapies.

    Pharmacy Benefit Management is a systematic approach to improving healthcare service delivery to patients. While many legal experts question the non-transparency of the inner dealings of PBM companies, the bottom line is they are able to secure lower cost drugs for patients to use.