PBM Pricing for Generic Drugs in Massachusetts Medicaid Programs and the Commercial Market

Spread-pricing refers to the difference between what a U.S. PBM reimburses a pharmacy for a drug and what it charges the payer (insurer) – the PBM retains the difference as potential profit. It is unclear how much of the payment the PBMs gives to pharmacies and how much is pocketed by PBMs.

This model stands in contrast to a “pass-through” model, in which PBMs charge payers the same amount that they reimburse pharmacies, plus an administrative fee.

This analysis examines PBM pricing practices for generic drugs in the MassHealth MCO program and the commercial market.