THE SKINNY ON SPREAD PRICING
Clients can choose spread pricing to help pay for the services Express Scripts provides.
Express Scripts negotiates discounts with retail pharmacies and other providers
Some clients choose a traditional pricing model known as spread pricing. This model works for many clients looking to mitigate risk and keep their monthly drug spend predictable. Other clients opt to pay what the PBM pays the pharmacy for each prescription, which is known as pass through pricing.
With spread pricing arrangements, the PBM and client agree to a guaranteed rate for prescriptions. If the PBM cannot negotiate a rate that is higher than the guaranteed amount set with the client, the PBM covers the costs. This means payers are protected from uncertainty around prescription costs.
Clients choose how they want to structure their benefits—to best balance cost, coverage and the needs of their employees and populations—and select a pricing model that works best for their needs.
How Spread Pricing Works
Spread refers to the difference between the Express Scripts-negotiated price paid to network pharmacies and the price paid by a client to us.
Express Scripts clients have the option to choose either a spread or a pass through pricing model or are able to combine these options, depending on their needs.
We protect our clients from risk
Whether our negotiations with pharmacies deliver a higher or lower prescription drug discount than what we originally agreed upon with our clients—our clients’ costs stay the same.
When the net price is less than the price paid by the client, PBMs retain the difference, or the “spread.”
When the net price is more than the price paid by the client, PBMs must assume the risk and pay the difference, or the “spread.”
Fully transparent view
Clients receive cost details for each pharmacy claim—and can audit network claims annually.
Administrative services
Clients may elect to utilize a spread pricing model to offset or forgo the cost of administrative services that Express Scripts provides.
Contract terms
A client’s typical contract term is three years with the opportunity to renegotiate pricing based on changes in the market environment.
Full transparency provided around the spread pricing model
Clients have the right to audit our network claims annually and regularly receive claim-level cost detail from Express Scripts at no additional charge. Additionally, beginning with plan year 2023, Express Scripts will provide clients enhanced financial and fee disclosure regarding their spread pricing arrangements for Form 5500 reporting and other plan administration functions.