Ginny Crisp, PharmD, CEO of Prescription Benefit Solutions, said most plan sponsors have never seen the generic spread their pharmacy benefit manager charges, because it rarely appears as a line item on reports.
According to Crisp, "Do you know your plan's generic spread? Not the discount. The spread is the gap between what your PBM pays the pharmacy for a generic and what it bills you. Most plan sponsors have never been shown it, because it is rarely a line on the report."
In spread pricing, a pharmacy benefit manager charges a plan sponsor more for a prescription drug than it reimburses to the pharmacy, keeping the difference as profit without disclosing the underlying drug cost. Spread pricing is especially common with generics due to their lower base costs, and the cumulative impact across millions of prescriptions can be significant, according to Navitus.
The Federal Trade Commission found that the top three pharmacy benefit managers earned an additional $1.4 billion in spread pricing in a recent study period, billing plan sponsors more than they reimbursed pharmacies. Pharmacy benefit manager-affiliated pharmacies also generated $7.3 billion in revenue above estimated drug acquisition costs, with revenue from markups increasing at a compound annual growth rate of 42 percent between 2017 and 2021, according to AJMC.
In response to mounting concerns about transparency and costs, use of alternative pharmacy benefit managers increased by about 19 percent from 2024 to 2025 while reliance on the largest three decreased by about 11 percent over the same period, according to Mintz.
