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Transparent Pharmacy Benefits

Stop spread pricing & understand the impact rebates have on your plan

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A Traditional Pharmacy Benefits Manager

Why have a member on your team that is incentivized to raise the prices of medications?  In fact, in Kentucky, the state where CIP is headquartered, PBMs made $123,000,000 from spread pricing from Medicaid programs alone in 2018.  They offer rebates and coupons to patients to lower the price of name-brand medications. What employees don’t realize is this dramatically increases costs to their health plan when compared to the generic equivalent, even both medications are made in the same building, on the same production line, by the same people.

  • Traditional PBMs often utilize a spread pricing business model, in which they may bill an employer 5-20 times more than they pay the pharmacy for medication, keeping the difference as profit.

  • Manufacturers’ coupons or rebates often do not eliminate any portion of the drug’s cost from the plan but motivate employees to choose the most expensive option, with the employer then picking up the total amount.  It can be hundreds or even thousands of times more expensive than the generic version! For example, for every $1.00 in rebates, drug prices, on average, increase by $1.17.

  • These strategies incentivize traditional PBMs to push higher-cost drugs for a greater profit – at your expense.

A Transparent Pharmacy Benefits Manager

By uncoupling the cost of the medications from the PBM’s profit, it lowers everyone’s costs – the insured, and the employer’s.  Additionally, they incentivize the patient to make educated, medically sound, and fiscally responsible decisions, not ones based on an opaque bait and switch.

  • Transparent PBMs make a set transaction fee (~$2 – $4) regardless of a drug’s price, rather than employing spreads and rebates as their revenue streams.

  • Transparent PBMs allow the use of advocacy programs that DO eliminate a drug’s cost from the plan.

  • By eliminating rebates & spread pricing, their incentives align with yours.

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