Will the rebate bubble burst?

Clients often ask about the future of rebates, which have been used by pharmacy benefits managers, health plans and plan sponsors to partially offset the cost of prescription drugs. Bottom line, drug manufacturers are passing on huge list price increases to consumers and in turn paying rebates somet...

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Bibliographic Details
Published inEmployee Benefit Adviser (Online)
Main Author Vogel, Scott
Format Trade Publication Article
LanguageEnglish
Published New York SourceMedia 20.08.2018
Subjects
Pharmacists
Pharmacy benefit management
Point of sale
Prescription drugs
Price increases
Rebates
Third party administrators
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Summary:Clients often ask about the future of rebates, which have been used by pharmacy benefits managers, health plans and plan sponsors to partially offset the cost of prescription drugs. Bottom line, drug manufacturers are passing on huge list price increases to consumers and in turn paying rebates sometimes as high or greater than 50% of the list price to PBMs which may or may not be passed on to Plan Sponsors. Some potential options may include: dramatically deeper discounts that would vary by formulary and essentially replace rebates, (however, technology to administer this is not currently available), incremental drug/plan specific discounts beyond the typical PBM pricing (the delivery of such discounts is challenging), some type of at risk or risk sharing contracts (although PBMs traditionally don’t like taking on risk) or pay for performance where payments to PBMs increase if certain predefined metrics are hit (which will likely create less options for employers as PBMs would likely mandate certain coverage rules).