Spread Pricing: How Drug Costs Really Work and Why You Pay More

When you pick up a prescription, what you pay at the counter isn’t what the pharmacy paid for the drug. That difference? It’s called spread pricing, the practice where pharmacies and insurers charge patients more than they pay for a drug, keeping the difference as profit. Also known as pharmacy markup, it’s how many pharmacies make money on generic drugs—especially when insurance doesn’t cover the full cost. You might think your copay is set by your plan, but often, it’s just a number pulled out of thin air to make the pharmacy’s profit look like your responsibility.

Take insulin, for example. A vial might cost a pharmacy $25, but your copay is $50—or even $100—because your insurer negotiated a list price that has nothing to do with actual cost. The pharmacy pockets the difference, and you’re left wondering why your medication keeps getting more expensive. This isn’t rare. It’s standard. The same thing happens with antibiotics like Keflex, seizure meds like Keppra, or even over-the-counter supplements. generic drugs, low-cost versions of brand-name medications approved by the FDA. Also known as bioequivalent drugs, they’re meant to save you money—but spread pricing often erases those savings. Even when the FDA approves a new generic, the price doesn’t drop for you. Why? Because pharmacies and PBMs (pharmacy benefit managers) control the pricing ladder, not the market.

And it’s not just about pills. Look at copay cards. They look like help—until they expire. Then you’re stuck paying the full inflated price because your insurer didn’t count the card toward your deductible. That’s the copay accumulator program, a policy that prevents manufacturer discounts from counting toward your out-of-pocket maximum. Also known as accumulator adjustment, it turns a $100 monthly savings into a $1,200 bill by December. Spread pricing feeds off these systems. It thrives when patients don’t know what the drug actually costs, when doctors don’t question prices, and when insurers refuse to track true costs.

Some states are pushing back. Others are forcing transparency. But until you start asking your pharmacy: "What did you pay for this?"—you’ll keep paying more than you should. The posts below show you exactly how this plays out: from how generic drug approval changes affect your wallet, to why your insulin costs more than the manufacturer’s list price, to how authorized generics keep prices high even when competition should lower them. You’ll see real examples of inflated meds, hidden markups, and what actually works to fight back.