Share of rebates
Manage drug benefit*
Health
Plan
Negotiated
rebate
Negotiate
formulary
placement
Administrative
fees, payment for
drug, and
dispensing fees
Contract directly
to dispense drugs
Payment for drug
and dispensing fee
Pharmacy
Payment
for drug
Drug Manufacturer
Pharmacy
Benefit
Manager
Payment
for drug
Flow of Funds
Services
The difference
between these
payments is called
“the spread”
Wholesaler