What is a Pharmacy Benefits Manager (PBM) and how can they offer discount cards?
A Pharmacy Benefits Manager (PBM) in it's most relevant sense to the majority of Americans the type of company that most U.S Citizens with health insurance receive their prescription coverage from. In general most Insurance companies will contract out to a PBM to offer members their prescription benefit. This is why if you look on your insurance card there is a separate number to call for prescription services.
PBMs have contracts with pharmacies that enable them and their members to purchase prescription medication at steep discounts. The discounts have a broad range but they generally fall between 10% and 84%. For this reason when someone with prescription insurance purchases medication from a pharmacy the PBM pays the pharmacy far less than a regular cash paying customer without insurance.
Medication discount cards are not insurance, however they do allow cash paying customers to purchase medication at the pre negotiated price the PBM has with the pharmacy. Therefore a cash paying customer that does not have insurance but does have a medication discount card can receive substantial savings over paying retail price.