The U.S. Government Accountability Office (GAO) and the U.S. Department of Health and Human Services, Office of Inspector General (OIG) both released reports confirming that PBM-negotiated rebates lower prescription drug costs in Medicare Part D.

  • The GAO found that virtually all – 99.6% – of prescription drug rebates negotiated by PBMs with drug manufacturers in Medicare Part D are passed through to drug plan sponsors.
  • The GAO highlighted that rebates are used by plan sponsors to lower costs and control premiums for beneficiaries.
  • The GAO found that PBM-negotiated rebates kept Part D spending 7% lower than it would have been without rebates.

Source: U.S. Government Accountability Office report: “Use of Pharmacy Benefit Managers and Efforts to Manage Drug Expenditures and Utilization,” July, 2019

  • The OIG found that in Part D, rebate-adjusted spending on brand drugs with rebates increased just 4% instead of the 19% price increases that would have occurred without rebates.
  • The OIG found increases in spending were not related to changes in rebates: 39.3% of rebated brand drugs had spending increases and rebate decreases, while 56.3% of rebated brand drugs had spending increases and
    rebate increases.
  • The OIG found only a small fraction of drugs – 10% – accounted for 60% of rebate growth between 2011 and 2015

Source: U.S. Dept. of Health & Human Services, Office of Inspector General,
“Rebates for Brand-Name Drugs in Part D Substantially Reduced the Growth in Spending from 2011 to 2015,” September, 2019

PBM negotiations drive down costs for beneficiaries and plan sponsors.


America’s pharmacy benefit managers (PBMs) are dedicated to controlling drug costs by encouraging competition among drug manufacturers and pharmacies and incentivizing consumers to take the most costeffective, clinically appropriate medications. PBMs facilitate patient pharmacy care management and provide real-time information to physicians and patients so they know, when a drug is prescribed, whether it is on the formulary and the patient’s cost-sharing obligation. PBMs uniquely have the expertise, tools, and data to ensure that pharmacies can dispense a patient’s drug, determine her cost-sharing, and know what the pharmacy will be paid, in real-time as the patient stands at the pharmacy counter.

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