PBMs sometimes intentionally blur the definitions of "brand drugs" and" generic drugs" to suit the PBM’s financial interests.
This includes improperly classifying a brand drug as a generic, and vice-versa; charging brand prices for generic products; and retaining rebates for brand drugs by calling them generics.
PBMs overcharge patients and their health plans by classifying many generic drugs as brands. Experts believe that this practice is very widespread and a part of up to 10% of all drugs dispensed, costing patients and payors tens of millions of dollars annually.
PBM contracts intentionally do not define these terms or are ambiguous to provide wiggle room in the miscategorizing of products.