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Pharmacy Benefit Manager (PBM)

A company that manages prescription drug benefits for health insurance plans, employers, and other organizations. They negotiate prices with drug manufacturers and pharmacies, create drug lists (formularies), and process prescription claims.

Fiduciary

A person or organization that has a legal and ethical duty to act in the best interest of another party. For example, a financial advisor is a fiduciary to their clients, meaning they must put their client's interests first.

ERISA (Employee Retirement Income Security Act of 1974)

A federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.

Group Health Plan

A health plan provided by an employer or employee organization to a group of employees and their families.

Indemnification

Protection against financial loss or legal liability. In this context, it refers to a PBM being protected from consequences if they fail in their duties.

Prescription Drug Formulary

A list of prescription drugs covered by a health plan. It often categorizes drugs into tiers based on cost, with preferred drugs typically having lower out-of-pocket costs.