Drug discounts that lower costs for consumers and employers.

Pharmacy benefit specialists use a host of solutions to deliver value for employers, health plans, and patients, including formulary management, predictive analytics, value-based care arrangements, and volume discounts. One of the tools that is most misunderstood is the prescription drug rebate.

Rebates are discounts that pharmacy benefit specialists negotiate on behalf of employers and patients when a drug is included in a formulary. Rebates enhance competition among drug manufacturers and help achieve affordability. They are not the cause, but rather the result of, high drug costs. While not achievable in every negotiation, rebates provide significant cost savings. Employers and health plans use the value of those rebates to lower premiums and patient cost-sharing, expand medication access, enhance benefits, or provide the rebate discounts to patients at the point-of-sale.

Without the ability to deliver rebates, health care costs would be much higher. In fact, the Congressional Budget Office (CBO) found that a proposal to eliminate the use of rebates in the Medicare Part D program would have cost taxpayers $170 billion in higher drug spending.* This reflects the value that pharmacy benefit specialists deliver through rebates. 

While rebates are only available on a subset of brand-name drugs, the savings realized through these negotiations help lower costs for all patients. Rebates are just one tool pharmacy benefit specialists use, but these discounts should be embraced as an important part of the affordability solution. 

• Policymakers should protect negotiating tools and focus on increasing drug competition so that rebates can deliver more savings for patients and taxpayers.

*https://www.cbo.gov/system/files/2019-05/55151-SupplementalMaterial.pdf