Five Things You Should Know About Workers’ Comp PBMs
Workers’ compensation insurers, third-party administrators, and other payers rely on their pharmacy benefit managers (PBMs) to ensure the appropriate use of medications by patients at the lowest net cost. The rising cost of prescription drugs and negative publicity surrounding PBM overcharges along with a lack of transparency have caused payers to examine their PBMs’ practices.
A PBM’s most basic function is to adjudicate prescription claims per payer specifications. Some of the myriad services that PBMs offer are designed specifically to control costs. Primarily, PBMs deliver savings through contractually guaranteed discounts, usually structured as a percentage off the average wholesale price (AWP) of the drug. The AWP is an arbitrary price assigned by drug manufacturers that has evolved into the standard reference price used for prescription drug reimbursement.