Posted on Apr 28, 2020


The Tale of Two PBM Pricing Models: Post 1

As a pharmacy consultant for more years than I would like to admit, I am always surprised by the continued debate between the pure transparent pass-through PBM pricing model and the traditional PBM pricing model.
The pass-through pricing model is where the PBM passes through the same pricing discounts and dispensing fees paid to the pharmacy to the plan sponsor for prescription drugs. PBMs typically generate revenue through a per prescription claim administration fee.
The traditional (spread) pricing model is where the PBM charges a plan sponsor a contracted price with specified discounts and dispensing fees for prescription claims while paying the pharmacy a different price. The difference between the amount billed to the plan sponsor and paid to the pharmacy is known as “spread” and is retained by the PBM as revenue in lieu of charging the plan sponsor a claim administration fee.
If the pass-through and traditional pricing models were people, the pass-through person would look at the traditional person as being less than transparent. The traditional person would think of themselves as just creative.

Continued on post 2...
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