Exploring the Effect of the Pharmacy Benefit Manager (PBM) on Pricing in Pharmaceutical Distribution Channels

Pharmacy benefit managers (PBMs) play an essential role set in pharmaceutical pricing and distribution channels. This article focuses on discussing the functions of PBMs in the pharmaceutical distribution channel and how they influence drug pricing. Moreover, this research also examines the impact of PBMs’ revenue and power on the National Average Drug Acquisition Cost at the retail level in the pharmaceutical distribution channel. This research sheds light on the importance of the PBMs on pharmaceutical pricing and distribution channel but also challenges the imbalance of power and dependency between PBMs, channel members and third-party payers in pharmaceutical distribution. The authors also seek to explain the complex relationship between PBMs and the multitude of stakeholders in the pharmaceutical distribution channel.