Posted on Apr 28, 2020

CobaltRx

The Tale of Two PBM Pricing Models: Post 2

Think of the pass-through model as a straight road. The contracts are short and relativity easy to read. However, the pass-through model does not offer financial pricing, dispensing fees, and rebate guarantees, just minimum expected performance levels. The belief is that by eliminating the “spread” the plan sponsor will lower their drug costs. However, this is not always the case. We see administration fees up to $8.00 per paid prescription that can impact a plan sponsor’s monthly cash flow.
The pass-through pricing approach to lowering drug spend is based on lowering unit costs by promoting lower-cost drug alternatives versus higher-cost drugs that drive higher rebates. For this reason, discounts and rebates under a pass-through plan typically are not as aggressive as the traditional pricing model but offer a lower net cost to plan sponsors because the initial lower cost drugs may more than offset the difference.

Cont'd on Post 3...
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