Private health plans contract with pharmacy benefit managers (PBMs) to administer their prescription drug benefits and help control costs. Health plans typically rely on PBMs to process claims, develop pharmacy networks, and negotiate rebates from drug manufacturers. When PBMs were first created, they were beneficial to the entire health care system. There were more than a dozen large PBMs across the country, all competing to provide pharmacies and patients with clear details about costs, fees, and rebates. But today, they have largely outgrown that role. Instead of fierce competition, three major PBMs-CVS Caremark, Express Scripts, and OptumRx-collectively control 80 percent of the market. Today, every major PBM is owned by a large health insurer and owns or is owned by a specialty mail order pharmacy, a retail pharmacy, or all three. This means that when PBMs negotiate with a pharmacy or health plan, they are negotiating with either themselves or one of their direct competitors. This book provides a brief overview of the key functions of PBMs, selected federal and state laws that regulate these entities, and issues.