Paul H. Flowers Jr. explains how prescription drugs have three prices in employer health plans: what the pharmacy gets, what a middleman charges the plan, and what employees pay. The middleman keeps the spread. Two-thirds of covered workers are already in self-funded plans where employers can see all three prices side by side.
Chapters
One pill, three prices. The pharmacy that hands your employee the bottle gets paid one price. The middleman who processed the claim bills your health plan a second, higher price. And your employee at the counter pays a third, set by a schedule nobody at your company ever built. The gap between those numbers doesn't go to the pharmacist, it doesn't go to the drugmaker, it goes to a middleman you never hired, under a contract you were never meant to read. They call it a rebate, a discount, savings. Here's my rule: Anyone who controls both the price and the discount isn't giving you savings. They're giving you a receipt. In plan after plan I look at, pharmacy is the fastest-growing line in the whole health budget. Not because your people got sicker, because the spread got wider. Self-funded employers get to open that contract, read their own claims, see all 3 prices on the same page. Two-thirds of covered workers are already in self-funded plans. The rest are paying the middleman's mortgage. Your pharmacist knows your employee by name. The middleman knows them by margin. Only one of them deserves your money. I read pharmacy contracts for a living. And the first time you see all three prices side by side, you don't get angry. You get free. I'm Paul H. Flowers Jr.
