Many Medicare Part D prescription drug plans use a PBM or Pharmacy Benefit Manager
to negotiate the plan's retail drug prices. A Medicare drug plan's PBM might also establish pharmacy networks, offer mail-order pharmacy services, assist with formulary development, and process pharmacy claims.
Since PBMs are responsible for millions of pharmaceutical transactions, a Medicare Part D plan's PBM should have negotiation and bargaining power so that the Medicare Part D plan might offer prescriptions at lower retail prices to their prescription drug plan members.
PBMs can be independent of the Medicare Part D plan or a subsidiary of the Medicare providers. Some
examples of major PBMs include Express Scripts and CVS Caremark. (You might
notice that these particular PBMs also offer their own Medicare Part D prescription drug plans.
is another large pharmacy
benefit manager (PBM) and is associated with UnitedHealth Group
(UnitedHealth Care). Here is some Optum information provided by the UnitedHealth Group site:
"OptumRx offers a full spectrum of pharmacy care services that are making
drugs more affordable and creating a better experience for consumers,
filling roughly 1.3 billion adjusted scripts annually. OptumRx solutions
are rooted in evidence-based clinical guidelines. This business makes
health care more affordable by helping people find the medications they
need at the lowest price, while helping benefit sponsors pay the lowest
(source as of 08/07/2021: https://www.unitedhealthgroup.com/who-we-are/businesses/optum.html
- see also: https://www.optum.com/)
Please note, retail drug prices change throughout the year.
A PBM can change retail drug prices throughout the Medicare Part D plan coverage year. So, if you have a Medicare Part D plan that includes cost-sharing in the form of co-insurance (for instance, you pay 25% of the retail price), your drug costs will fluctuate throughout the plan year as the PBM changes the retail price - and some people find this cost-uncertainty a bit unsettling. Also, if you reach your plan's Coverage Gap or Donut Hole, your cost-sharing will be 25% of the drug's retail price - and again, this retail cost can fluctuate over time.
Choosing a Medicare Part D drug plan with Co-payment vs. Coinsurance
If you wish to have consistent coverage costs throughout your Medicare prescription drug plan's Initial Coverage phase
, then you may wish to consider a Medicare Part D plan that has cost-sharing in the form of co-payment (for instance, you pay $30 for a Tier 2 drug, no matter how the actual retail cost of the drug fluctuates). However, as noted above, if you leave the Initial Coverage Phase and reach the Donut Hole, you will pay 25% of the formulary drug's retail drug cost.