Holy Smoke! I’m in the wrong business………………..
“Across all payers, rebates represent 27% of total pharmacy spending.” SOURCE: Drug Rebates Impact Rising Prescription Drug Spending
In an earlier blog posting a Florida Blue Cross ASO agreement states “The PBM generally passes Rebates through to Florida Blue, less a 20% fee as part of its compensation for its services…………”
If a PBM takes 20% of rebates as a fee, and rebates equal 27% of total pharmacy spending, those fees equal 5.4% of total Rx spend.
Let’s round that off to 5%.
To get an estimate of how much your PBM may be earning, take your annual Rx spend and multiply that number by 5%. That’s their Rx rebate fee. Then add in all the other revenue streams including spread pricing and other admin fees. Now you have an idea of where your money could be going.
I want to be a PBM when I grow up……………………
