PBM stands for which term?

• A. Pharmacy Benefit Memorandum
• B. Personal Banking Manager
• C. Pharmacy Benefits Module
• D. Pharmacy Benefit Manager

Answer: (D)

PBM stands for Pharmacy Benefit Manager, the organization that administers a health plan's prescription drug benefits. They negotiate prices and rebates with drug manufacturers, design formularies and tiered copay structures, run the pharmacy network, and process drug claims. They also use utilization management tools like prior authorization, step therapy, and quantity limits to control costs and ensure appropriate use. While a pharmacy benefits module could be a software component that manages benefits, the common meaning of the acronym in healthcare is the manager/administrator role. The other options describe documents, a banking role, or a software module rather than the entity responsible for managing prescription drug benefits.