Full Definition
Pharmacy benefit management is the administration of prescription drug programs for health plans, including formulary design, pharmacy network contracting, drug utilization management, and claims processing. PBMs serve as intermediaries between health plans, pharmacies, and drug manufacturers. The pharmacy benefit management industry is dominated by three vertically integrated companies — CVS Caremark, Express Scripts (Cigna), and OptumRx (UnitedHealth) — that collectively manage benefits for the majority of insured Americans.