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SmithRx can save you % on average
How does SmithRx calculate this?
We are comparing the historical performance of SmithRx to the average performance of a group of . Differences in cost derive from pass-through pricing model, eliminating spread, and passing 100% of rebates to you. For complete methodology, learn more here.
Wait, what is spread?
Spread is the difference between the average wholesale price (AWP) of the drug and the price clients and members pay for the drug. Increased spread can derive from poorly negotiated discounts or inflating prices for profit.
Some member prescriptions generate a cash incentive that has been negotiated by the PBM and drug manufacturer.
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Traditional vs. Pass-through
The 3 levers of cost
In a traditional pricing model, PBMs can make money through spread, keeping rebates, and charging an admin fee. We have seen many versions of how these three levers are mixed together and often where a PBM makes the most money is where a client has negotiated the least. SmithRx operates on a pass-through model so the only cost to you is the admin fee.
Higher SmithRx admin fee?
Our admin fees may seem higher at first glance. However, since we do not take any drug spreads and do not keep any rebates, your total cost is lower.
More importantly, you will now know what and where all your costs are.
Pass-through or 100% pass-through?
We often hear, "We are currently receiving pass-through rebates from our current PBM." However, while the incumbent may be passing through some rebates, you are often not receiving 100% of the rebates that your members' prescriptions have generated.
At SmithRx, we pass through 100% of the rebates that your members' prescriptions have generated. It's as straightforward as that.
Let's explore spread a bit more
While many focus on the Average Wholesale Price (AWP) discount for brands, we urge you to double check how good your rates are for generics. While generics may seem inexpensive, a lesser discount on between 70-80% of total utilization can add up quickly.
What about specialty?
Specialty often represents more than 30% of total spend. Consider implementing a targeted drug utilization managment program to make your specialty discount even higher.