What aspect of pharmacy benefit management is primarily associated with ingredient costs?

The aspect of pharmacy benefit management that is primarily associated with ingredient costs is the cost of goods sold. Ingredient costs refer specifically to the expenses associated with acquiring the medications that are dispensed to patients. This includes the base price of the drug itself, which contributes directly to the overall costs that a pharmacy incurs for its inventory and operations.

Understanding ingredient costs is crucial for pharmacy benefit management as it affects the pricing strategies and reimbursement rates determined by pharmacy benefit managers (PBMs). Effective management of these costs can influence overall health care expenses, making it important for PBMs to monitor and negotiate these prices closely to ensure that pharmacy benefits are both sustainable and fair to patients. By focusing on the cost of goods sold, PBMs can strategize on procurement, formulary management, and overall cost efficiencies.