The Role of Pharmacy Benefit Managers in Formulary Design: Service Providers or Fiduciaries?

Drug benefit plan sponsors often contract with pharmacy benefit managers (PBMs) to assist them in the design and management of their plans. PBMs exercise discretion over a key component of the benefit plan the design of a preferred drug list, or national formulary, that the plan sponsor uses as a starting point for its own local formulary. Generally, such elements as copayments and prior authorization requirements are part of the plan design rather than the formulary design and, hence, are discretionary acts of the plan sponsor. But, even on occasion, these elements are built into national formularies by the PBM.