PBMs and Pharmacies: What You Need to Know

As health care costs continue rising, employers are looking for ways to save money on employee benefits. One area where they can make a big impact is in their pharmacy benefit management (PBM) program. PBMs are third-party administrators who handle prescription drug benefits for health plans, including negotiating drug prices with pharmacies, processing claims and managing formularies.

However, traditional PBMs have been scrutinized in recent years for their pricing practices and conflicts of interest. Employers need to be aware of these issues when selecting a PBM and managing their pharmacy benefits program.

Here are some key things that employers need to know about PBMs and pharmacies:

PBMs may not always provide the lowest drug prices.

PBMs negotiate drug prices with pharmacies on behalf of health plans. However, they may not always provide the lowest prices. PBMs and pharmacies may negotiate higher prices in exchange for incentives from drug manufacturers, and this can lead to higher costs for employers and employees.

Employers should carefully review PBM contracts and pricing models to ensure they get the best possible prices for their prescription drugs.

PBMs may have conflicts of interest.

PBMs may have conflicts of interest, due to vertical integration, when it comes to drug pricing. Many traditional PBMs are vertically integrated, meaning they own not only the PBM but also the specialty or mail-order pharmacy. The PBM may then receive a higher reimbursement rate from the health plan for drugs dispensed from its own pharmacy.

Employers should ask their PBMs about any potential conflicts of interest and ensure that their pharmacy benefit program is transparent, unbiased and in the best interest of their members.

Pharmacies may charge different prices for the same drug.

Pharmacies, many times due to PBM contracts, may charge different prices for the same drug, even within the same geographic area. This can make it difficult for employers to determine whether they are getting the best possible prices for their prescription drugs. This means that employers should be aware of any PBM restrictions that might influence drug prices.

Prescription drug costs are a major driver of health care spending.

Prescription drug costs are a major driver of health care spending overall, accounting for a growing share of Americans’ total health care costs. Employers can help manage these costs by promoting generic drugs, encouraging employees to use mail-order pharmacies and offering disease management programs to help employees manage chronic conditions.

Employers can work with PBMs to improve drug pricing.

Employers can work with their PBM to improve drug pricing and reduce costs. For example, they can negotiate lower prices for specific drugs or drug classes and work with PBMs and pharmacies to implement value-based pricing models that improve patient outcomes. Such practices are inherent to AffirmedRx’s PBM model and should be standard across all PBMs, as they promote transparency, affordability and ultimately, better health care access for all stakeholders.

The Types of Pharmacy

Retail, specialty and mail-order pharmacies are three different types of pharmacies that offer various types of pharmaceutical options to patients. Most everyone is accustomed to retail pharmacies as they are the most common and can be found in drugstores, supermarkets and other retail locations. However, there are other types of pharmacies that deliver specific services to particular customer demographics.

Retail Pharmacies

Retail pharmacies are the most common type of pharmacy found in drugstores, supermarkets and other retail outlets. They offer a variety of over-the-counter medications, vitamins and supplements, as well as prescription medications. Retail pharmacies benefit patients as they are easily accessible, and customers can easily pick up their prescriptions while running errands. Retail pharmacies also offer services like medication therapy management, which help customers manage their medications and provides education on medication safety and side effects.

Specialty Pharmacies

Specialty pharmacies cater to patients with complex medical conditions requiring specialized medications and care. Specialty pharmacies offer medications, including injectable medications that have to be administered by providers, that treat conditions like cancer, HIV/AIDS, multiple sclerosis and other chronic illnesses. These pharmacies provide personalized care and support to patients, including medication management, education and counseling. Specialty pharmacies work closely with health care providers to ensure patients receive the right medication and follow-up care.

Mail-Order Pharmacies

Mail-order pharmacies offer a convenient option for customers who prefer to have their medications delivered to their doorstep. These pharmacies typically offer a 90-day supply of medications, which may be beneficial for customers who require long-term or maintenance medications. Mail-order pharmacies may also offer cost savings compared to retail or specialty pharmacies. Customers can easily order their medications online or by phone and have them delivered to their homes. Mail-order pharmacies also provide medication therapy management services to ensure customers receive the right medication and follow-up care.


AffirmedRx is a PBM that understands navigating the complex health care system can be overwhelming and costly, which is why we offer personalized support and clinically-sound resources. At AffirmedRx, we pride ourselves on always doing what’s best for our members. We believe that everyone deserves access to affordable health care and medications, and we strive to make this a reality.

This commitment to our members is reflected in our approach to prescription drug coverage. It’s why we contract directly with local pharmacies within our member populations and prioritize transparency and fairness in our pricing and reimbursement policies, ensuring that our members receive the most affordable and effective medications they need. AffirmedRx understands that every member’s health care journey is unique, and we are dedicated to providing personalized care and support to help our members achieve their health goals. AffirmedRx is focused on maintaining a broad pharmacy network with no conflicts of interest.

What Does it All Mean?

PBMs and pharmacies play a critical role in managing prescription drug benefits for employers and employees. Employers need to be aware of potential pricing issues and conflicts of interest and work with their PBM to ensure that they are getting the best possible prices for their prescription drugs. By taking a proactive approach to managing the programs offered by PBMs and pharmacies, employers can help control health care costs and improve the health and well-being of their members.

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