Is Your Client Overpaying for Generic Medications?

At DisclosedRx, our mission is to help our clients save money on their prescription spend by eliminating all unnecessary costs. In this three-part series, we'll explore how we achieve this goal, starting with eradicating spread pricing.

What is Spread Pricing?

Spread pricing occurs when a Pharmacy Benefit Manager (PBM) charges employers and employees more for a medication to increase their own profit. This tactic can be difficult to identify, but at DisclosedRx, we have a process in place to uncover it.

Our Approach: When we conduct a reprice, we put ourselves in the shoes of the incumbent PBM. We compare what they charged for a medication to what we would have charged on the same day, for the same medication, at the same pharmacy. This allows us to identify the amount of spread pricing.

Case Study: In one case study, we found that our client was spending nearly $9.8 million through their incumbent PBM. By simply filling the exact same medications at the same pharmacies on the same days, we were able to reduce the client's cost by over $901,000. That's an average of nearly $20 per claim, and it happened over 45,000 times in the previous year.

Our Fiduciary Responsibility: As a fiduciary, we are obligated to make decisions in the best interests of our clients, not ourselves. When a client works with DisclosedRx, the remuneration of the pharmacy always matches what the employer pays. We have an independent third party, the Validation Institute, who verifies this with an annual audit of our books and contractual guarantees.

The Impact on High Deductible Health Plans: Spread pricing is particularly insidious when an employer offers a high deductible health plan for its employees. In this scenario, much of the spread pricing burden is borne directly by the employees who have to pay a high deductible before the insurance kicks in. They're forced to pay more for their medications simply to increase the profit of a PBM. This doesn't happen at DisclosedRx.

Removing spread pricing is just one of the ways we protect our clients and members from overpaying for their medications. Our contract safeguards our clients and members from all conflicts of interest and PBM shell games. If you're interested in learning more about our Fiduciary Model, we'd be happy to discuss it with you anytime.

Stay tuned for the next part of our series, where we'll discuss how we protect our clients from overpaying on brand medications.