Pharmacy benefit manager
Pharmacy Benefit Manager
A Pharmacy Benefit Manager (PBM) is a third-party administrator of prescription drug programs for commercial health plans, self-insured employer plans, Medicare Part D plans, the Federal Employees Health Benefits Program, and state government employee plans.
Pronunciation
Pharmacy Benefit Manager: /ˈfɑːrməsi bɪˈnɛfɪt ˈmænɪdʒər/
Etymology
The term "Pharmacy Benefit Manager" is derived from the role these entities play in managing the benefits related to pharmacy or prescription drugs within health insurance plans.
Role
Pharmacy Benefit Managers act as intermediaries between the payer (usually a health insurance company) and everyone else in the healthcare system. They are charged with negotiating costs with pharmacies and drug manufacturers, processing prescription drug claims, and managing the formulary of covered drugs.
Related Terms
- Formulary: A list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits.
- Health Insurance: A type of insurance coverage that pays for medical and surgical expenses incurred by the insured.
- Prescription Drug: A pharmaceutical drug that legally requires a medical prescription to be dispensed.
- Third-Party Administrator: An organization that processes insurance claims or certain aspects of employee benefit plans for a separate entity.
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