Which of the following is one way PBMs manage prescription drug costs effectively?

Formulary management strategies are a primary method used by Pharmacy Benefit Managers (PBMs) to manage prescription drug costs effectively. By creating a formulary, which is essentially a list of covered medications, PBMs can negotiate better prices with pharmaceutical manufacturers and encourage the use of generic or preferred brand medications that provide similar therapeutic benefits at a lower cost. This approach allows PBMs to influence prescribing behavior among healthcare providers by promoting the use of cost-effective medications, ultimately leading to significant savings for both insurers and patients.

In addition to cost management, formulary management can also streamline pharmacy operations and improve adherence to treatment protocols by ensuring patients have access to medications that are both effective and economically viable. This strategic selection of drugs helps to balance the needs of patients for effective treatment with the financial considerations of insurance plans and the overall healthcare system.

Other options, while relevant in different contexts, do not align as directly with effective cost management. Exclusive use of low-tier copayments might limit the ability to encourage the use of more cost-effective treatment options. Promoting brand drug usage could lead to higher costs, as brand-name medications are typically more expensive than generics. Lastly, providing unrestricted access to all medications can inflate costs significantly, as managing the overall drug budget would become