Rising cost of prescription drugs has continued to make the national news and has become the subject of multiple congressional hearings. Consequently, many drug manufactures and insurance companies are slowing the rates of cost increase allow consumers to receive a portion of the manufacturer rebates that have been retained by the health insurance plans. Multiple companies including Merck, Pfizer, and Novartis have announced that they will be cutting the price of certain medications allowing others drugs to increase only at the price of inflation as opposed to originally planned higher increases. These actions have been the result of increased scrutiny and pressure by the White House as part of President Trump’s campaign promises that resulted in the Americans Patient First Act, a 39 page plan outlining policies focused on competition and reducing costs.
Another focus of the Americans Patient First Act is around the practice of drug rebates that insurers receive from drug manufacturers. These rebates have come under great debate with some arguing they help keep costs lower while others claiming they are the reason for higher drug prices. One of the goals of the American Patient First Act would be to require insurers to pass a portion of these rebates back to Medicare beneficiaries. These pending changes around rebates influenced United Healthcare and Aetna to issue statements in March that they would pass back rebates to certain customers in their group based insurance plans beginning in 2019. This is expected to impact about $10 million customers between the two companies. Locally, BlueCross and BlueShield of North Carolina announced that beginning in 2019 it would also be sharing rebates with members enrolled in their high deductible health plans and/or coinsurance drug plans. The rebates are to be issued at point of service. While not all drugs are eligible for rebates, the return of rebates will lower the cost of medication for the buyer below what was previously paid.
While this may be good news for consumers, many health insurers have stated that the retention of these rebates are keeping overall premiums down. If insurers begin passing rebates back to consumers, will carriers simply make up the difference by increasing premiums? United Healthcare said that they will not increase rates as a result of the change. These changes are seemingly steps in the right direction however the road to true cost control in the pharmacy industry will take several years.
Please contact your consultant should have any questions about the upcoming rebate changes.