Which of the following is a source of manufacturer revenue for PBMs?

Manufacturer rebates are a significant source of revenue for Pharmacy Benefit Managers (PBMs). When PBMs negotiate with drug manufacturers, they can secure rebates based on the volume of prescriptions written or the favorable positioning of a medication on the formulary. These rebates are intended to incentivize PBMs to encourage the use of specific drugs, often those that may be more expensive but offer additional benefits to the manufacturer and, in some cases, to the patients.

This process allows manufacturers to maintain interaction with PBMs and ensures that their products are competitively priced within the market. The economics behind these arrangements benefits the PBM as they can improve their bottom line through the rebates they receive when they negotiate successfully.

In contrast to this, co-pays contribute to patient out-of-pocket expenses and do not constitute a revenue stream for PBMs from manufacturers. Volume discounts refer to the price reductions manufacturers may provide to wholesalers or pharmacies, but they do not directly generate revenue for PBMs themselves. Service charges might be related to administrative fees that PBMs impose on payers or pharmacies but do not pertain to manufacturer revenue directly. Therefore, the primary source of manufacturer revenue generated for PBMs comes from the negotiated rebates, which make option C the correct choice.