GLOSSARY · PHARMACY
PBM, the middleman behind drug coverage.
A PBM (pharmacy benefit manager) is a company that manages prescription drug benefits for health plans and employers, deciding which drugs are covered, what pharmacies are paid, and what patients owe at the counter.
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What it means
PBMs build the formularies that list covered drugs, negotiate rebates from drug manufacturers, contract pharmacy networks, and process pharmacy claims. The three largest, CVS Caremark, Express Scripts, and Optum Rx, handle most prescription claims in the United States.
Much of their income comes from rebates and pricing spreads that are hard to see from outside, which has drawn congressional hearings, an FTC inquiry, and new state laws.
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Why it matters to a brand operator
A cash-pay telehealth brand usually works outside the PBM system. The patient pays the clinic or the pharmacy directly and no insurance claim is filed, which keeps pricing simple and is why many brands never deal with a PBM at all.
PBMs matter the moment a patient wants insurance to pay for the drug. Coverage for branded GLP-1s, for example, often requires prior authorization and depends on where the drug sits on the PBM's formulary. A brand that promises insurance coverage is promising something a PBM decides. Manufacturer cash-pay programs for some branded drugs give patients another route around the PBM.
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How Tessic Health handles it
Medication on Tessic Health passes through at the wholesale price with 0% markup, so a brand's cash-pay pricing starts from the pharmacy's actual cost with no spread added along the way.
See the published termsRELATED TERMS
Words that come up next.
Formulary
A formulary is a list of medications that a health plan covers or that a clinic's providers prescribe, along with the doses, forms, and prices that apply.
Telehealth parity
Telehealth parity is a type of state law that requires private health insurers to cover telehealth services the way they cover in-person care, and in some states to pay the same rate.
Dispensing vs. prescribing
Dispensing vs. prescribing is a legal distinction that separates the clinician who decides a patient should take a drug from the pharmacy that prepares and delivers it.