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January 22/29, 2003

Financial Consequences of Drug Benefit Plans

JAMA. 2003;289(4):423-424. doi:10.1001/jama.289.4.423-a

In Reply: Drs Clark and Garis describe what is commonly referred to as the "spread" on prescription drugs. Employers sometimes negotiate a rate with the pharmacy benefit manager (PBM) using a discount to the AWP—eg, 14% off AWP, excluding dispensing fees. At the same time, the PBM may negotiate a lower rate with the pharmacy—eg, 15% off AWP. The PBM keeps the spread, or difference. The amounts we report are costs actually paid by the employer. To the extent there are any discrepancies between what the PBM and the employer pay, we agree with them that vigilance on the part of employers—and competition among PBMs—should limit them.