Posted on Apr 28, 2020


The Tale of Two PBM Pricing Models: Post 3

In contrast, the traditional model is like a bumpy curvy mountain road. The contract includes a lot of financial pricing, dispensing fees, and rebate guarantees with language to allow the PBM to be in the best position to meet the guarantees. Their approach is to lower drug spend by negotiating more aggressive discounts and dispensing fees with the pharmacy network and larger rebates from manufacturers. The theory here is that this will result in a lower unit cost after the rebates are subtracted in lieu of focusing on lower-cost drug alternatives.
This traditional model strategy of savings coming from larger rebates is not without controversy. By their negotiating higher rebates, it forces drug manufacturers to raise list pricing for their products. However, PBMs will counter that they have been passing along a larger share of the rebates to insurers.

Cont'd on Post 4...
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