Large-Employer Groups Dispute PCMA Claim That Some Firms Prefer Spread Pricing

In a recent report, the Pharmaceutical Care Management Association (PCMA), the trade group representing the largest PBMs, claimed that employers often choose spread pricing when they set up their PBM contracts. But employer plan sponsor groups, which have pushed for years for a federal ban on spread pricing, tell AIS Health that the way PCMA describes employers’ pharmacy benefit options is misleading — instead, the plan sponsor groups say, PBMs manipulate employers into spread pricing arrangements.

PBMs are under intense scrutiny in Congress: Legislators from both parties seem likely to pass more aggressive regulation of the industry this year. A ban on spread pricing is one of the key policies under consideration. Spread pricing is the business practice in which PBMs pay pharmacies dispensing a drug less than what they charge payers, with the PBM pocketing the difference. This can result in substantial revenue for the PBM, as the “spread” for the same pharmaceutical product can vary widely from pharmacy to pharmacy.

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Peter Johnson

Peter Johnson

Peter has worked as a journalist since 2011 and has covered health care since 2020. At AIS Health, Peter covers trends in finance, business and policy that affect the health insurance and pharma sectors. For Health Plan Weekly, he covers all aspects of the U.S. health insurance sector, including employer-sponsored insurance, Medicaid managed care, Medicare Advantage and the Affordable Care Act individual marketplaces. In Radar on Drug Benefits, Peter covers the operations of (and conflicts between) pharmacy benefit managers and pharmaceutical manufacturers, with a particular focus on pricing dynamics and market access. Before joining AIS Health, Peter covered transportation, public safety and local government for various outlets in Seattle, his hometown and current place of residence. He graduated with a B.A. from Colby College.

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