HIRP Research Brief

No. 1

Pharmacy Benefit Management: The Right Prescription?
April 1995


Lynn Etheredge


This paper summarizes information about pharmacy benefit management and its potential impacts on health care. Topics covered include the structure of the industry, a description of the major PBM managed care tools, how PBM works, how it changes relations among patients, physicians, employers, health plans, pharmacists, and drug manufacturers, and the economic dynamics and business strategies that appear to shape its development. The paper also provides information and speculation about the use of PBM methods via public sector arrangements.

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