Taking prescription drugs may be more American than apple pie. According to the Centers for Disease Control and Prevention (CDC), nearly half the people in the United States report having taken at least one medicine in the past 30 days. (By comparison, just about 1 in 10 Americans say apple is their favorite pie.) Who decides what medicines are covered on your health insurance plan and at what price? You may think the drug maker, your health insurance company or your employer sets the rules and prices for prescription drug coverage — and they do all play a role. But the most important influencer on drug coverage in the U.S. may be one you’ve never heard of: the pharmacy benefit manager (PBM). Given the influence PBMs have on which medicines are covered and what they’ll cost, you might want to understand who they are and how they work. What is a pharmacy benefit manager?PBMs are companies that manage drug coverage for health insurers, large employers and other companies that pay for health benefits, such as labor unions or government agencies. These companies sit between your health insurance company and the drug makers. In other words, PBMs are the middleman.PBMs do a few things that can directly affect you and your access to drugs:Administer drug benefits on behalf of health insurers and employersCreate formularies or preferred drug lists, which determine which drugs will and will not be covered on an insurance plan Negotiate prices of drugs with drug makers, including rebates and discountsNegotiate rates paid to pharmacies for the drugs they carryProcess pharmacy claims for insurers and their membersSet up networks of pharmacies to fill prescriptions for health plan membersManage mail-order pharmacies for specialty productsAccess to certain medications is determined by whether they make it on the formulary in the first place and then is affected by the price of the medicine. Your out-of-pocket costs for medicines is typically based on the negotiated rates determined by the PBM.Who owns the PBMs?PBMs are usually for-profit companies. Some are very large. The three biggest PBMs reportedly cover more than 275 million Americans and account for nearly 90% of the market. Some PBMs are independent. Others are owned by health insurance companies and/or large retail or specialty pharmacies.What are the pros and cons of PBMs?The main argument in favor of PBMs is that they can help lower costs through negotiation. And, for many people, drug costs pose real hardships. In fact, nearly 1 in 4 people in the U.S. report having a hard time paying for medications.The Centers for Medicare and Medicaid Services (CMS) has said that PBMs have helped lower drug prices. According to the Pharmaceutical Care Management Association (PCMA), the national association that represents PBMs, PBMs will save health plans and individuals more than $1 trillion over 10 years. At the same time, some critics suggest that PBMs have an incentive to promote more expensive drugs. PBMs often get paid rebates based on a percentage of a drug’s list price. That means