What PBMs are, who the big three are, and why your drug coverage works the way it does. Three companies you've probably never heard of control nearly 80% of all prescription drug decisions in the United States.
A Pharmacy Benefit Manager is a company that sits between you, your pharmacy, your insurance plan, and the drug manufacturer. On paper, their job is to process prescription claims, negotiate drug prices, and build the list of covered medications your plan uses — called a formulary.
In practice, PBMs decide which drugs your insurance covers, which tier those drugs land on, which pharmacies are in your network, and whether you need prior authorization before you can fill a prescription. The Federal Trade Commission, which launched a major investigation into PBMs in 2022, described their influence plainly: they control the prescription drug supply chain for the majority of insured Americans, and their financial incentives do not always point in the direction of your health.
Three PBMs dominate the market. As of 2023, they processed 79% of all prescription drug claims in the United States, covering approximately 270 million people.
