In other words, one barrel of oil, a bushel of wheat or ounce of gold is essentially the same or indistinguishable from another of its variety. The opposite of a commodity is a specialty good or service. Most PBMs attempt to differentiate their services out of the commodity class because the only way to compete in a commodity market is on price.
On the other hand, specialty goods and services warrant higher prices because of a specific feature or benefit. In the procurement of PBM services, buyers wrongly place high importance on a "perceived" benefit. This is different from a specific benefit or feature. The cost of services depends heavily on the PBMs pricing model.
Traditional or Legacy
- The PBM discloses cash flows in the sponsor's contract. Learn more about this here.
- PBM passes through all rebates and network prices to the sponsor (no spread pricing).
- The PBM provides full accounting w/auditing provisions, passes through all manufacturer revenue and more competitive drug pricing than industry norms.