Project #3: Data Analytics for Managerial Accounting (25 Points)

You work for Timp Health, a large, for-profit managed health care company. The division within the company that you work for specializes in pharmacy benefit management (PBM). According to the American Pharmacists Association, "PBMs are primarily responsible for developing and maintaining the formulary, contracting with pharmacies, negotiating discounts and rebates with drug manufacturers, and processing and paying prescription drug claims. For the most part, they work with self-insured companies and government programs striving to maintain or reduce the pharmacy expenditures of the plan while concurrently trying to improve health care outcomes."

For this case, you will focus specifically on drug costs related to Medicare Part D. Medicare Part D (also called the Medicare prescription drug benefit) subsidizes the cost of prescription drugs and drug insurance premiums for Medicare beneficiaries in the United States. The following diagram illustrates the role of PBM in the prescription fulfillment process. The PBM helps by working with members who have Medicare coverage and need pharmaceutical drugs, the pharmacy that fills drug prescriptions and the government that helps pay for the drugs.

Members PBM (also Government 2 15 acting as an 6 insurance provider) Pharmacy 4. 7 Information flows