Prescription Drug Rebate Facts and Sources

The Association Between Drug Rebates and List Prices

Growing divergence between pharmaceutical list and net prices suggest that manufacturer rebates to pharmacy benefit managers (PBMs) and other distribution system intermediaries may play a role in rising drug prices. We analyze new data on list and estimated net prices of U.S. branded pharmaceuticals, finding that, on average, a $1 increase in rebates is associated with a $1.17 increase in list prices. The positive and near 1:1 relationship remains when single-source and multi-source drugs are considered separately (although the effect is smaller and less statistically significant for multi-source drugs), and when drugs with high Medicaid share are excluded.

FTC Launches Inquiry Into Prescription Drug Middlemen Industry

The Federal Trade Commission announced today that it will launch an inquiry into the prescription drug middleman industry, requiring the six largest pharmacy benefit managers to provide information and records regarding their business practices. The agency’s inquiry will scrutinize the impact of vertically integrated pharmacy benefit managers on the access and affordability of prescription drugs. As part of this inquiry, the FTC will send compulsory orders to CVS Caremark; Express Scripts, Inc.; OptumRx, Inc.; Humana Inc.; Prime Therapeutics LLC; and MedImpact Healthcare Systems, Inc.

Department of Managed Health Care – Prescription Drug Cost Transparency Report

This report looks at the impact of the cost of prescription drugs on health plan premiums and compares this data across the reporting years. The DMHC considered the total volume of prescription drugs prescribed by health plans and the total cost paid by health plans for these drugs, on both an aggregate spending level and a per member per month (PMPM) basis and compared the annualized data. The DMHC also analyzed how the 25 most frequently prescribed drugs, the 25 most costly drugs, and the 25 drugs with the highest year-over-year increase in total annual spending impacted health plan premiums over the course of the last four years.

Measuring the Impact of Point of Sale Rebates on the Commercial Health Insurance Market

There has been heightened interest in understanding the dynamics, challenges, and impacts of passing pharmacy rebates directly to members at the point of sale (POS). This report explores how applying rebates in this manner would affect both member premiums and cost sharing for an average member as well as hypothetical patients with selected chronic conditions.

Examining the Factors Driving the Rising Cost of a Century Old Drug

Diabetes is among the most pervasive, deadly, and costly diseases in the United States. According to the Centers for Disease Control and Prevention (CDC), diabetes is the 7th leading cause of death in the U.S. and more than 34 million people in the country live with the disease.