Short answer: With spread pricing, the PBM charges the plan more for a drug than it pays the pharmacy and keeps the difference. A pass-through model charges the plan what the pharmacy was paid and earns a stated fee instead, but the contract definitions, not the label “transparent,” decide what the plan actually pays.
Under a spread arrangement, the plan sees the price it is billed, not the price the pharmacy received. A pass-through offer should define exactly which rebates, fees, discounts and affiliated-company revenue go to the plan, how drugs are classified as brand or generic, and the plan’s audit rights.
Federal law is adding visibility: for plan years beginning on or after 30 months after February 3, 2026 (August 3, 2028), a PBM must give the group health plan reports at least every 6 months (quarterly on request) that, for larger plans, show for each drug what the plan paid the PBM, what the pharmacy was paid, and the difference on each claim, along with rebates received.
Compare offers on net cost after rebates for the employer’s actual drug mix, especially specialty drugs, not on discount percentages alone.