Is Spread Pricing Bad for Employers?

Woman frustrated with spread pricing

Spread pricing is where a Pharmacy Benefit Manager (PBM) charges the plan sponsor more than they pay the pharmacy for medication and keeps the “spread” as profit. Plan sponsors typically do not know this practice is occurring.

What Is the Issue with Spread Pricing?

PBMs can use this type of pricing to significantly increase their profit at the expense of the plan. Plan sponsors are left in the dark on the mark-up per prescription, yet they are expected to foot the bill.

Is There Another Option?

Yes. Plans can work with a transparent, pass-through PBM that uses a per prescription, or per member, administration fee instead of non-transparent pricing models.

By switching to a pass-through model, plan sponsors can often save 15% – 30% on their total Rx spend.

What is the Advantage of Transparent, Pass-Through Pricing?

Eliminating spread pricing drives significant savings and aligns the plan sponsor’s interests with the interests of the PBM.

Instead of being biased to drugs that generate additional revenue, the PBM can be objective and design a plan that truly meets the needs of the client.

How Can I See if Our Plan’s PBM Utilizes Spread Pricing?

If you are not sure how your plan’s PBM makes revenue, or if the PBM charges “$0 administration fees”, chances are they utilize spread pricing.

Transparent, pass-through pharmacy benefit managers can run an apples-to-apples pricing comparison to uncover how much spread is in your current pricing.

Request an analysis by reaching out to our team!

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