April 19, 2017
Visante conducted an analysis of SSR Health data to see if there is a correlation between the prices that drug manufacturers set and the rebates that they negotiate with pharmacy benefit managers (PBMs) working on behalf of employers, unions, health plans, and government programs offering prescription drug coverage. This analysis was commissioned by the Pharmaceutical Care Management Association (PCMA). Visante reviewed gross and net sales for the top 200 self-administered, patent-protected, brand-name drugs in the United States. The research estimated annual rebate levels over the 2011-2016 time period in 23 major drug categories and compared these against manufacturer list price levels and increases for the same categories over the same period.
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- 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.
- Drug companies are increasing prices regardless of rebate levels.
- 90% of rebates are passed through to plans and consumers to reduce their prescription drug benefit costs.
Based on this analysis, it is clear that rebates reduce plan and consumer costs and that there is no causal relationship between the prices manufacturers set and the rebates they negotiate with PBMs.