Pharmacy Benefits Managers Impact on Pharmacy


The Role of Pharmacy Benefits Managers in Prescription Pricing and Efficiency

The significant role of Pharmacy Benefits Managers (PBMs) in the pharmacy industry, and their impact
on pharmacy pricing, consumer access to drugs, and intra-industry competition forms the crux of this
article. The influence of PBMs is underscored by escalating global mental health problems which
heighten the demand for community pharmacy services (Crespo-Gonzalez, Dineen-Griffin, Rae, & Hill,
2022). Specifically in Australia, where mental illness is common, the impact is more pronounced. The
role of community pharmacists, who formed part of primary healthcare teams delivering mental health
support to 4.3 million people in 2018-2019, cannot be overstated yet is plagued with challenges tied to
integration, recognition, and compensation (Crespo-Gonzalez et al., 2022). This article titled
“Navigating the Impact of Pharmacy Benefits Managers on the Pharmacy Industry”, seeks to elucidate
these intricate dynamics, and offer navigation strategies for stakeholders in the realm of pharmaceutics.

How Pharmacy Benefits Managers Influence Consumer Drug Access and Public Health

Pharmacy Benefits Managers (PBMs) significantly impact pharmacy pricing, commonly by influencing
specialty pharmacy turnaround time (TAT), which crucially determines the cost incurred by pharmacies
for prescription processing (Gabriel et al., 2022). Changes in these turnaround times can affect the
financial implications of operational procedures at the pharmacy. Important steps in prescription
processing include data entry, prior authorization, prescription filling, and final check by a pharmacist,
all of which impact TAT (Gabriel et al., 2022). Moreover, various factors like patient, pharmacy, and
provider characteristics, as well as clinical situations and health benefit design or formulary
considerations, play a pivotal role in influencing TAT. These factors can create barriers such as patient
communication issues, prior authorization complications, and prescriber issues, further elongating TAT
and increasing costs (Gabriel et al., 2022). However, certain facilitators can help countermeasure these
challenges. For example, the integration of modern technology in pharmacy operational procedures
can expedite processes, thereby reducing TAT. This includes the execution of electronic prior
authorization and adding diagnosis codes on electronic prescriptions (Gabriel et al., 2022).
Furthermore, the study suggests that multidisciplinary coordination and cooperation with physicians
and specialists are highly effective in improving TAT, thereby aiding in controlling and reducing the
financial impact on the pharmacy (Gabriel et al., 2022). These insights reveal the intricate dynamics of
how PBMs indirectly influence pharmacy pricing through TAT.

Pharmacy Benefits Managers (PBMs) play a significant role in determining consumer access to
pharmaceutical products. Recent research concerning the pharmaceutical industry and its retail arm –
the pharmacies – reveals some concerning trends regarding consumer access to certain products like
tobacco and nicotine replacement therapy (NRT) (Pimentel & Apollonio, 2019). Tobacco, a major
preventable cause of death, and its availability in U.S. chain pharmacies, despite its lethal potential, is
particularly disconcerting considering that the prices of these products are lower than other stores
(Pimentel & Apollonio, 2019). More so, such chain pharmacies are often found promoting the usage of
these harmful products and readily selling them to the minors (Pimentel & Apollonio, 2019). Such
trends raise questions about the ethical implications of selling harmful goods in a setting that should
prioritize health. However, the shift to tobacco-free pharmacies, such as CVS discontinuing tobacco
sales in all its U.S. locations since 2014, shows that consumer access to harmful products can be
limited without adverse effects on traffic or sales (Pimentel & Apollonio, 2019). Instead of tobacco,
these pharmacies display NRT products, promoting smoking cessation rather than initiation (Pimentel &
Apollonio, 2019). As gatekeepers to medications, PBMs influence consumer access to such
commodities. Studies like these suggest that PBMs can use their influence to promote healthier
choices, proving beneficial in terms of public health. However, more research is needed to determine
the specific impact of PBMs on consumer access to drugs, as these businesses persist in their complex

The Effect of Pharmacy Benefits Managers on Pharmacy Industry Competition and Market Dynamics

Pharmacy Benefits Managers (PBMs) have a profound impact on competition within the pharmacy
industry, shaping the landscape in numerous ways. As intermediaries between insurers,
pharmaceutical companies, and pharmacies, PBMs exert significant influence by determining which
drugs are covered by insurance and at what reimbursement level. Their role in managing
formularies—the lists of drugs that a health plan agrees to cover—can substantially affect pharmacy
revenues. When PBMs favor certain drugs, possibly due to manufacturer rebates, they drive
pharmacies to prioritize these medications, frequently shifting market dynamics and competitive
balances. This preferential treatment can push pharmacies to focus less on patient care and more on
the financial aspects of drug dispensing to remain profitable amidst the narrowed formulary selections.
The consolidation of the PBM industry has led to a few major players having an outsized impact on
competition. Large PBMs often own their own mail-order and specialty pharmacies, which creates
vertical integration that can be detrimental to independent and small pharmacies. These smaller
entities, lacking the scale to negotiate terms comparable to those of larger chains, may find themselves
at a disadvantage, struggling to compete with the lower drug prices and broader access that larger
PBMs can offer through their affiliated pharmacies. Consequently, this can reduce consumer choice
and potentially drive small, local pharmacies out of business, further entrenching the market power of
the dominant PBMs. Furthermore, the power held by PBMs to dictate reimbursement rates to
pharmacies can thin operating margins to such an extent that it hampers the ability of pharmacies to
compete effectively. Pharmacies might be compelled to cut back on services, staff, or even endure
closures, which not only undermines competition but also compromises the quality of care available to
patients in some communities. This intricate web of PBM influence on competition delineates a
pharmacy industry landscape that is ever-evolving and often challenging for its smaller participants.

Navigating the Complex Influence of Pharmacy Benefits Managers in the Pharmacy Sector

In conclusion, the multifaceted influence of Pharmacy Benefits Managers (PBMs) on the pharmacy industry extends across several critical areas, from drug pricing and consumer access to the overarching structure of competition within the industry. Their control over prescription turnaround times can inadvertently steer pharmacy operations, leading to increased costs and operational inefficiencies, yet their role also carries the potential for fostering improvements through technological advancements and collaborative practices. Additionally, by dictating the availability of health-affecting products, PBMs are situated at the ethical crossroads of consumer health and industry profits, with the capability to either hinder or enhance public health outcomes based on their governance of drug access. The undeniable sway of PBMs over industry competition, emphasized by the trend toward consolidation and vertical integration, presents a formidable challenge to independent pharmacies and underscores the need for careful oversight to ensure a healthy, competitive market that primarily serves the needs of consumers. As the role of PBMs continues to provoke debate and scrutiny, the industry and its stakeholders must navigate these complexities with a balanced approach, seeking solutions that optimize patient care, ensure fair pricing, and maintain a competitive market landscape.


Crespo-Gonzalez, C., Dineen-Griffin, S., Rae, J., & Hill, R. A. (2022). A qualitative exploration of mental
health services provided in community pharmacies. PloS one, 17(5), e0268259.

Gabriel, M. H., Kotschevar, C. M., Tarver, D., Mastrangelo, V., Pezzullo, L., & Campbell, P. J. (2022).
Specialty pharmacy turnaround time impediments, facilitators, and good practices. Journal of managed
care & specialty pharmacy, 28(11), 1244–1251.

Pimentel, L., & Apollonio, D. E. (2019). Placement and sales of tobacco products and nicotine
replacement therapy in tobacco-free and tobacco-selling pharmacies in Northern California: an
observational study. BMJ open, 9(6), e025603.

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