The PBM Power Play

INTRODUCTION
The role of Pharmacy Benefit Managers, more commonly known as “PBMs,”
has been mentioned frequently in debates and discussions in the South
Carolina State House in recent months, mirroring national attention on the
topic by Republicans and Democrats alike. But the topic brings with it lots of
confusion. Thus, the Palmetto Promise team has taken a deep dive into this
complex topic. We break down what PBMs are, whether there is a need for
PBM reform, and if so, what actions might be taken at the state level here in
South Carolina and across the nation.

WHAT ARE PBMS?
Pharmacy Benefit Managers, PBMs, are companies that act as intermediaries between drug manufacturers, health insurers, and pharmacies. The accompanying diagram, adapted from JCO Oncology Practice and a video explanation supported by AHealthcareZ, offers descriptions of the entire drug supply chain, including the role of the PBM.

You may have heard of some of the larger PBMs. According to the American Medical Association, CVS Health is the largest PBM (21.3% market share), followed by OptumRx (20.8%), Express Scripts (17.1%), and Prime Therapeutics (10.3%).

How Do PBMS AFFECT YOUR LIFE?
Most Americans have been prescribed a medication which they must later pick up from a virtual or brick and mortar pharmacy at some point in their lives. If this applies to you, you may have been affected by a PBM without realizing it. That’s because at their core, PBMs help choose which medications your doctor is allowed to prescribe and how much you will pay for them. The PBM works as a liaison between your doctor, the pharmacy, your health insurance, and the companies that manufacture and market the medication. In theory, they are supposed to make these medicines more affordable and accessible.