PBM Competition in Pharmaceutical Supply Chain: Formulary Design and Drug Pricing

  title={PBM Competition in Pharmaceutical Supply Chain: Formulary Design and Drug Pricing},
  author={Panagiotis Kouvelis and Yixuan Xiao and Nan Yang},
  journal={Manufacturing & Service Operations Management},
We model the competition among multiple Pharmacy Benefit Managers (PBMs) for the patronage of a client organization. Each PBM selects a list of prices to be charged to the client organization for each of the branded and generic drugs within a therapeutical class (price decision) and a formulary list that assigns branded drugs to preferred or non-preferred tiers (formulary decision). Drug manufacturers offer rebates to PBMs for drugs on preferred tier of formularies. The individuals… CONTINUE READING
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