(Washington, D.C.) — A new market analysis contradicts claims that drug pricing is contingent on the level of rebates and discounts manufacturers negotiate with the pharmacy benefit managers (PBMs) that represent employer, union, and government plans offering prescription drug coverage.
Visante analyzed data on gross and net sales for the top 200 self-administered, patent-protected, brand-name drugs and found no correlation between the price drugmakers set and negotiated rebates. The report was commissioned by the Pharmaceutical Care Management Association (PCMA).
PBMs are hired by America’s largest, most sophisticated, health purchasers to reduce costs by, among other things, promoting generics and negotiating rebates and discounts on brand-name drugs. Typically, PBMs pass along 90 percent or more of these savings to plans, which use them to cut premiums, out-of-pocket costs and other expenses. Many health purchasers require PBMs to pass through 100 percent of rebates.
Key findings include:
- There is no correlation between the prices drug companies set and the rebates they negotiate with PBMs.
- There are prominent cases of higher-than-average price increases in drug categories where manufacturers negotiate relatively low rebates.
- There are prominent cases of lower-than-average price increases in drug categories where manufacturers negotiate relatively high rebates
- Drugmakers are increasing prices regardless of rebate levels.
Click here to read the research.
“This study debunks the notion that the prices drugmakers set are contingent on the rebates they negotiate with PBMs,” said PCMA President and CEO Mark Merritt. “Ironically, many higher priced drugs involve little or no such rebates.”