What Is a Pharmacy Benefit Manager (PBM)?

A pharmacy benefit manager (PBM) is a third-party company that manages prescription drug benefits for health insurance plans, including Medicare Part D, employer-sponsored plans, and Medicaid. PBMs negotiate drug prices, create formularies, and process prescription claims on behalf of insurers and patients.

Why do PBMs matter?

PBMs affect medication costs, availability, and coverage rules, making them a key player in prescription drug access. They negotiate discounts and rebates with drug manufacturers, which can lower prices—but also create challenges, such as restrictions on covered medications or requirements for prior authorization.

How PBMs impact Medicare and drug costs

• Medicare Part D & Advantage plans: PBMs manage formularies, which determine which drugs are covered and at what cost.
• Tiered pricing: Medications are placed into tiers, affecting copays and out-of-pocket costs for beneficiaries.
• Step therapy & prior authorization: PBMs may require patients to try lower-cost drugs first before approving pricier options.
• Pharmacy networks: Using preferred pharmacies can lead to lower copays, but going out of network may mean higher costs.

How Solace can help

PBM rules can be confusing and frustrating, especially for seniors managing multiple prescriptions. A Solace advocate can help you understand your drug plan, navigate prior authorization requirements, and explore cost-saving alternatives, such as patient assistance programs or lower-cost pharmacies.

What to do next

Struggling with high prescription costs or denied medication coverage? Explore cost-saving options and get the medications you need–find an advocate.