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Avoid the Spread: Spread pricing often inflates Rx cost

Picture this: spread pricing, a sneaky pricing model used by pharmacy benefit managers (PBMs). It's all about charging payers more than they pay the pharmacy for a medication, and guess what? They keep the difference as profit! Sneaky, right? Well, brace yourself because it's not just sneaky, it can actually affect the cost of prescription drugs for employers in some seriously troubling ways. Hold on tight as we take a wild ride through these effects:

First off, we're talking higher costs. Yep, spread pricing means higher prescription drug costs for employers. PBMs charge payers more than what they fork over to the pharmacy, inflating the prescription drug costs for us consumers. Not cool, PBMs, not cool. And you know what else? Our dear plan sponsors have a tough time seeing the actual cost of drugs. Thanks to the lack of transparency, the payment schedules PBMs generate for pharmacies are top-secret! Talk about keeping you in the dark.

But wait, there's more! Financial predictability, or the lack thereof. Spread pricing throws a wrench in the works for employers trying to predict their costs. These PBMs have revenue flowing in from different sources, like spread pricing, mail order fees, drug rebate percentages, data sales, and a bunch of other sneaky fees. With all these unpredictable sources, it's no wonder employers struggle to budget accordingly.

And let's not forget about our dear taxpayer dollars, which seem to be disappearing into PBMs' coffers. Some states have discovered that excessive amounts of taxpayer money end up staying with these PBMs, all because of spread pricing. Take Virginia, for instance, where PBMs pocket a whopping $29 million just from spread pricing alone. Meanwhile, in Maryland, it's a cool $72 million annually. And in Florida, they even send patients to their own PBM-affiliated pharmacies. Are you getting as riled up as we are?

Last but not least, inflated drug prices. Brace yourself, because spread pricing strikes again. By charging payers more than they should, PBMs are driving up prescription drug costs for us consumers. It's like a never-ending cycle of inflated prices and sneaky tactics!

So remember, the next time you come across a PBM proposal that seems too good to be true, pause for a moment, take a deep breath, and let that skeptic in you take a deeper dive. Trust us, it's worth it.

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