Spread Pricing: How Your PBM Keeps the Difference
Your plan pays one price. The pharmacy gets less. The PBM keeps the gap.
That's spread pricing. Most of the people paying for it have never heard the term, and the companies doing it would like to keep it that way.
Two Prices, One Prescription
A PBM, pharmacy benefit manager, is the middleman that runs drug coverage for insurers and employers. The big three are CVS Caremark, Express Scripts and OptumRx.
When you fill a prescription with insurance, two separate transactions happen. The PBM bills your plan for the drug. Then the PBM pays the pharmacy for the drug. Those two numbers don't have to match.
When the plan is billed more than the pharmacy is paid, the PBM keeps the difference. That difference is the spread.
How Spread Pricing Works
Picture a single generic prescription moving through the system.
You hand your card to the pharmacist. The pharmacy submits a claim to the PBM. The PBM tells the pharmacy what it will pay, and the pharmacy has no say in that number. Separately, the PBM bills your employer or insurer for that same claim at a higher price. The PBM pockets the gap between the two.
Your employer sees the bill. The pharmacy sees the payment. Only the PBM sees both.
Why Nobody Notices
You don't notice because your copay looks normal. Your employer doesn't notice because the claim looks like every other claim on a long report. And the pharmacy can't tell you, because it never sees what the plan was charged.
The whole thing runs on prices nobody can easily check. Claims are priced off benchmarks like AWP, average wholesale price, which the pricing databases set at the manufacturer's list price times 1.20. Nobody actually pays AWP. That leaves plenty of room in the middle.
Fake Benchmarks Make Room in the Middle
We can't see inside a PBM's books. We can see how far claim prices drift from real cost. Here is what Medicare paid per prescription for several generics, compared with our price for the same quantity:
Drug | Medicare paid per prescription (2025) | Our price | Wasted per Rx |
Everolimus | $3,451.70 | $318 | $3,133.70 (91%) |
Pirfenidone | $1,875.55 | $169 | $1,706.55 (91%) |
Icosapent | $222.70 | $60 | $162.70 (73%) |
Ursodiol | $144.74 | $30 | $114.74 (79%) |
When the claim price sits that far above the real price, there's a lot of money to divide between the parties in the middle. The patient and the plan sponsor aren't the ones getting it.
Who Pays
You do, in your premium. Your employer does, in its health plan budget, which competes with raises. Taxpayers do when spread pricing shows up in Medicaid.
And independent pharmacies pay too. When the PBM sets what the pharmacy gets paid, the pharmacy can end up squeezed on the same claim the plan was overcharged on. They make more when drugs cost more, and they make more again when they pay the pharmacy less.
Questions Employers Should Ask Their PBM
If you sponsor a health plan, you're the one paying the spread. You also have the right to ask about it.
Start with the contract. Ask whether it allows spread pricing, or whether it's pass-through, meaning the plan pays exactly what the pharmacy was paid plus a disclosed fee. Ask whether you can see both numbers on every claim: what the plan was billed and what the pharmacy received.
Then ask how generics are priced. Is it off AWP, a list-price benchmark nobody pays, or off something tied to real cost like NADAC, the government's survey of what pharmacies actually pay? Ask who keeps manufacturer rebates and how they're reported.
Finally, ask who owns the pharmacies in your network and the mail-order pharmacy your members get steered to. If the answer is the PBM's own parent company, every claim filled there is money moving inside one company.
A PBM that isn't hiding anything should be able to answer all of that in writing. If the answers are vague, you've learned where some of your premium goes.
No PBM, No Spread
Forest Park Pharmacy has no PBM contracts and doesn't take insurance. There is no second transaction and no hidden gap. The price on our price checker is our actual acquisition cost plus a transparent fee, and that's the price you pay.
We have no reason to pretend the price is higher than it is. We compete on price.
Head to forestparkpharmacy.com to look at our price checker and transfer today to save. See ya.
