Pharmacy Benefit Manager (PBM)

Pharmacy Benefit Managers (PBMs) are third-party administrators of prescription drug benefit programs for health plans, employers, and government programs. PBMs process and pay prescription claims, develop and maintain drug formularies, negotiate discounts and rebates with drug manufacturers, and contract with pharmacy networks.

In the 340B context, PBMs interact with covered entity programs primarily through the reimbursement of prescriptions dispensed at contract pharmacies. When a contract pharmacy submits a claim for a 340B-purchased drug to a PBM-administered health plan, the PBM processes the claim and reimburses the pharmacy. The covered entity receives the 340B savings as the difference between the reimbursement and the 340B purchase price.

PBM relationships and reimbursement policies can affect the economics of contract pharmacy arrangements. Some PBMs have implemented policies that affect how they handle 340B claims, adding complexity to contract pharmacy management.