A Pharmacy Benefits Optimizer (PBO) is a consultant to self-insured health plans that include a prescription drug benefit. A PBO is an advocate for the employer to get the best prescription drug benefit for the plan’s participants.
A PBO Partners with Health Plans to Optimize Drug Benefits
When an employer adopts a self-funded health plan, the employer agrees to pay for the healthcare costs of the plan’s participants. The employer may enlist the help of a Third-Party Administrator (TPA) in connection with the set-up and administration of the plan. In turn, the TPA may engage one or more provider networks to provide medical care to the plan’s participants. In addition, the TPA will negotiate with a Pharmacy Benefits Manager (PBM) to provide drug benefits to the plan.
A PBM is Not Your Friend
A PBM is an intermediary between an employer’s plan and the retail pharmacy that sells prescription drugs to the plan’s participants. A PBM is often engaged by the plan’s TPA to determine which drugs an employer’s plan will cover and how much the plan will pay to the pharmacy. The largest PBMs are owned by insurance companies. As a result, a PBM may have other concerns than the best interest of the employer’s self-funded health plan.
A PBO Levels the Playing Field
A PBO works with, but not for, a PBM. Whereas a PBM is generally engaged by a plan’s TPA, a PBO is engaged by the employer or the employer’s benefits consultant to advocate for the plan. A PBM often has as its goal to maximize its profits and the profits of its insurance-company owner. A PBO has as its goal to provide the best pharmacy benefit at the best price for the plan’s participants. A PBO levels the playing field between the employer and the PBM. A PBO uses its expertise and marketing power to negotiate with the PBM to get the best pharmacy benefit possible. A PBO fills the power vacuum between the employer’s plan and the PBM.