Which of the following are methods by which PBMs help plan sponsors save money?

Formulary management is a critical method by which Pharmacy Benefit Managers (PBMs) help plan sponsors save money. This approach involves creating a list of covered drugs that prioritizes cost-effective medications while ensuring necessary treatment options are available to patients. By leveraging formulary management, PBMs can negotiate better prices with manufacturers and impose tiered co-pay structures that encourage the use of lower-cost medications.

Effective formulary management influences prescribing habits, guiding healthcare providers to choose medications that have a favorable cost-benefit profile. This not only helps in controlling expenses associated with pharmaceutical care but also promotes the use of drugs that may be equally effective at a lower cost, thus maximizing the financial efficiency for the plan sponsors.

In the context of the other methods, while increasing the use of generics is indeed a beneficial strategy in terms of cost savings, formulary management encompasses a broader range of controls and strategies, leading to optimal medication use and comprehensive cost containment. Administrative costs and plan design also play roles in overall financial management but do not directly address the medication tiering and utilization management that formulary strategies provide.