October 1, 2009

Legislation is currently being considered by Congress that would change how drug manufacturer rebates are determined and paid under Medicare Part D for drugs used by full dual eligible beneficiaries. Currently, pharmacy benefit managers (PBMs) and drug manufacturers negotiate these rebates. On brand name drugs, the rebates average 15.9 percent of the average negotiated price, based on average wholesale price (AWP) net of discounts. Plans can use these rebates to lower their Part D bid and thereby lower beneficiary premiums.

Read the full report.