Pharmacy benefit manager
Also called: PBM
Clinical reviewer: Elena Gizzi, MSN, RN · Last checked September 16, 2026
What is a PBM?
Pharmacy benefit manager is a company that negotiates drug rebates with manufacturers, builds the formulary and its rules, and reimburses pharmacies for a health plan's prescription claims. The largest PBMs are affiliated with the largest insurers and pharmacies, and the FTC says they have enormous influence over which drugs are prescribed and what patients pay.
What does a PBM actually do?
A PBM negotiates rebates and fees with drug manufacturers, creates drug formularies and the policies around them, and reimburses pharmacies for members' prescriptions [1]. That gives it enormous influence over which drugs get prescribed, which pharmacies patients can use, and how much patients ultimately pay at the pharmacy counter [1].
Why does the FTC call PBMs "middlemen"?
The FTC's July 2024 interim staff report on prescription drug middlemen found that the top six PBMs process more than 90 percent of US prescriptions and are increasingly vertically integrated with the largest health insurers and pharmacies, which the FTC says lets them profit at the expense of patients and independent pharmacists [2]. Aetna, for example, uses CVS Caremark, an affiliated PBM, to administer its pharmacy benefits [3].
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This entry is for education and is not medical advice. Talk with a licensed clinician about your own situation before starting, stopping, or changing any treatment.
