Spread Pricing: How Drug Costs Really Work and What It Means for You

When you pick up a prescription, you might think the price you pay is what the pharmacy paid for the drug. It’s not. Spread pricing, the difference between what a pharmacy benefit manager (PBM) pays a pharmacy for a drug and what the insurer reimburses the pharmacy. Also known as pharmacy markup, it’s a hidden cost built into nearly every insured prescription in the U.S. This isn’t about profit margins—it’s about how your copay can be higher than the actual cost of the medicine, and why your insurance card doesn’t always save you money.

Spread pricing connects directly to how pharmacy benefit managers, third-party companies that manage drug benefits for insurers and employers. Also known as PBMs, they control which drugs are covered, negotiate prices with manufacturers, and set reimbursement rates for pharmacies. But here’s the catch: PBMs often don’t pass savings to you. Instead, they keep the difference. For example, a drug that costs $10 at the wholesaler might be reimbursed at $50 by your plan. You pay your $10 copay, the pharmacy gets $50, and the PBM pockets $40. That’s spread pricing in action. It’s why some people pay more for a drug with insurance than without.

This system hits hardest with chronic conditions. If you’re on insulin, a life-saving medication for people with diabetes. Also known as diabetes medication, it, you’ve likely seen your copay jump even when the drug’s wholesale price dropped. The same goes for heart meds, antidepressants, or any high-demand drug. PBMs use spread pricing to make up for low reimbursement rates from Medicare Part D and private insurers. It’s not illegal—it’s just not transparent. And it’s why so many people end up using manufacturer savings programs or buying generics online.

The posts below show how this system affects real people. You’ll find guides on how to use copay cards to cut brand drug costs, how to navigate Medicare Part D coverage, and how to spot when your pharmacy is charging you more than the drug actually costs. You’ll also see how medication-related liver damage or kidney risks can be worsened when patients skip doses because they can’t afford the spread-priced copay. This isn’t just about pricing—it’s about access, safety, and fairness. What you’re about to read isn’t theory. It’s what’s happening in pharmacies across the country, right now, to people just like you.