Express Scripts will emphasize benefits of spread pricing

Express Scripts wants to convince senators to keep spread pricing as an option for PBMs, according to a copy of President Adam Kautzner’s written testimony for Wednesday’s HELP committee hearing obtained by Axios.

Why it matters: HELP’s bill on pharmacy benefit managers would limit spread pricing and require all rebates to be passed through to the health plan.

Zoom out: Spread pricing occurs when a PBM charges a payer more for a drug than it reimburses a pharmacy for the same product.

• Express Scripts launched a new "fully transparency pricing model" in April that gives employers the option to pay exactly what the PBM pays for pharmaceuticals.

What they’re saying: Spread pricing makes client costs more predictable and can reduce Express Scripts’ service fees, Kautzner says in his testimony. The practice insulates employers and health plans from drug price fluctuations, according to Kautzner.

• Congress should not ban spread pricing without a better understanding of the financial implications of doing so, Kautzner says.

The bottom line: “Spread pricing is not a unique arrangement to Express Scripts or PBMs. It is used across the prescription drug supply chain, from manufacturers to pharmacies, and across the broader health care industry and economy, from retail to automotives to food and beverage,” Kautzner says.