FAQ – Frequently asked questions
What is a pharmacy benefit manager (PBM)?
A PBM is an organization that manages pharmaceutical benefits for employers, managed care organizations or other medical providers.
PBM activities may include all or some of the following:
- Benefit plan design
- Claims processing (also known as claims adjudication)
- Creation and administration of retail/mail networks
- Drug utilization review
- Formulary management
- Prior authorization
- Disease and health management
What are the advantages of using a PBM?
- Pharmacy management is the focus of pharmacy vendors (i.e., PBMs).
- The carve-out solution continues to resonate with employers as PBMs provide a strong value proposition in managing pharmacy
- Financial arrangements are typically backed by guarantees
- Designated account management team includes clinical pharmacist support
- Greater opportunity for transparency
- More flexibility and greater control over pharmacy benefit
- Retail pharmacy network options
- Formulary options with rebates
- Communication support
- Strong reporting, including online access and web-enabled capabilities
What is a carve-out pharmacy benefit arrangement?
A pharmacy carve-out pharmacy arrangement is when pharmacy benefits are separated from medical benefits and are managed outside of an organization’s primary medical health plan vendor. This approach is self-insured, and an employer works directly with a PBM to administer and manage the pharmacy benefits.