I just saw a video where the Prescription cost to the Pharmacy was $2, the cash cost to customer (without insurance) would be $4 ($2 profit), however if the customer says they have insurance, the Pharmacy has a Gag Clause with the PBM so they can not disclose the Cash price, the customer now has a $10 copay, the Pharmacy gets $3 ($1 profit) and the PBM gets $7 in clawback. So in this case, the customer pays more, the pharmacy makes less, and the excess money goes to the PBM
Street price is $100. PMB negotiates drug for $80. You pay $20 copay. PBM charges your insurer $90 for the drug, you paid $20 with copay, so insurer owes PBM $70. The spread is $70-$60=$10. Or at least that’s how I understand spread. PBMs were originally being compensated via an admin fee, but are increasingly not sharing the drug discount with the consumer.
How would the PBM bill $100, when my employer/I already paid a premium on the pharmacy plan? So the spread didn't translate into a profit to PBM, right?
wrong - the get paid a per transaction fee on all scripts. in addition, do some research on spread pricing as well as rebates they demand and keep. This problem isn't nearly as neat as taking a small (or even standard) percentage for services - hence their desire and need for no transparency. Pretty interesting if you take the time to educate yourself on that. unfortunately almost none of the public does, or cares. PBM's are the single largest problem with our rising healthcare costs.
matt jones that’s not true If u do the oversimplified math they take a $.17 fee per transaction now multiply that by the number of annual prescriptions filled in the US 4.5 billion and u have a whopping 765 million dollars in revenue That’s just their original legit fee
Thanks for explaining this
I just saw a video where the Prescription cost to the Pharmacy was $2, the cash cost to customer (without insurance) would be $4 ($2 profit), however if the customer says they have insurance, the Pharmacy has a Gag Clause with the PBM so they can not disclose the Cash price, the customer now has a $10 copay, the Pharmacy gets $3 ($1 profit) and the PBM gets $7 in clawback.
So in this case, the customer pays more, the pharmacy makes less, and the excess money goes to the PBM
Street price is $100. PMB negotiates drug for $80. You pay $20 copay. PBM charges your insurer $90 for the drug, you paid $20 with copay, so insurer owes PBM $70. The spread is $70-$60=$10. Or at least that’s how I understand spread. PBMs were originally being compensated via an admin fee, but are increasingly not sharing the drug discount with the consumer.
How would the PBM bill $100, when my employer/I already paid a premium on the pharmacy plan? So the spread didn't translate into a profit to PBM, right?
wrong - the get paid a per transaction fee on all scripts. in addition, do some research on spread pricing as well as rebates they demand and keep. This problem isn't nearly as neat as taking a small (or even standard) percentage for services - hence their desire and need for no transparency. Pretty interesting if you take the time to educate yourself on that. unfortunately almost none of the public does, or cares. PBM's are the single largest problem with our rising healthcare costs.
Peg Rice, I'm writing this in 2017 and the PBMs are taking ALL the profits from our pharmacy.
If there wasn't spread they wouldn't make money. Durrr
matt jones that’s not true
If u do the oversimplified math they take a $.17 fee per transaction now multiply that by the number of annual prescriptions filled in the US 4.5 billion and u have a whopping 765 million dollars in revenue
That’s just their original legit fee