Prescription drug rebates on the rise
Prescription Spend

Tina Reed


May 9, 2022

Prescription drug rebates from drugmakers to commercial health plans are steadily increasing, a study published in JAMA Health Forum shows.

Why it matters: This is all part of a system in which drugmakers negotiate to get their product on the formularies of middlemen known as pharmacy benefit managers and health plans.

“While drug rebates can reduce plans’ net costs, rebates do not reduce patients’ cost sharing,” the authors write.

This can ultimately “incentivize drug manufacturers to inflate list prices and PBMs to distort drug formularies to favor high list price and high-rebate therapies,” the authors write.

What they’re saying: This is also an equity issue, particularly for patients buying individual plans.

“We have the sick people paying more than their fair share for the drug and the rebate goes back to the plan to reduce premiums for the healthy,” said Ge Bai, a professor of accounting at Johns Hopkins Carey Business School who was one of the authors of the study.

What to watch: Trump era rules to block rebates for Medicare stalled under the Biden administration.

But the issue has been gaining attention on Capitol Hill, with a bipartisan group of lawmakers pushing to outlaw rebates as part of legislation that would cap the price of insulin, FierceHealthcare wrote.

Continue Reading

The Watko Way – Longevity

The Watko Way – Longevity

by Jessica Hawkins, Account Manager April 18, 2023 When I think about Watko Benefit Group and what is mutually important between myself and our company, the word longevity comes to mind. I'm proud to say that the majority of the clients I support...

Prescription Drug Plan Resources

Prescription Drug Plan Resources

By Kari Hoback, Senior Account Manager April 5, 2023 If you have ever taken a deep dive into prescription drug plans and pharmacy benefits (or even dipped your toe in), you know it can be confusing and difficult to understand.  Rebates, step...