What is a "spread" in the context of Pharmacy Benefit Managers?

In the context of Pharmacy Benefit Managers (PBMs), a "spread" refers to the difference between the price at which PBMs purchase prescription drugs and the price at which they sell those drugs to health plans or network pharmacies. This difference can represent the revenue that PBMs generate from their activities. The spread can have significant implications for the overall cost of prescription drugs within a health plan, as it effectively creates a markup that is reflected in the pricing provided to payers.

Understanding this concept is crucial for recognizing how PBMs operate and the financial flows involved in the purchasing and dispensing of medications. The spread can impact how much patients pay for their medications, particularly if the PBM retains a portion of the savings from negotiated discounts.

The other options focus on different aspects of drug pricing and rebates, but do not accurately define what a "spread" is in relation to PBMs. The total cost of prescription drugs encompasses more than just the buying and selling prices, discounts reflect distinct negotiations between pharmacies and PBMs, and rebates specifically relate to incentives from drug manufacturers rather than the pricing mechanism within the PBM system itself.