Drug Price Negotiations & Rebates

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The pandemic is having a devastating impact on America’s seniors. The Medicare Part D prescription drug program provides our nation’s seniors with affordable drug coverage, which is more important now than ever. However, the Administration would threaten to destabilize the Medicare Part D program by dramatically increasing premiums for the vast majority of Part D enrollees.

The White House should abandon the Executive Order on rebates that would gut tools used for negotiating lower drug costs.

Read the results from the new Public Sector Healthcare Roundtable Survey

State Health Plans Use Drug Rebates to Lower Premiums and Enhance Benefits

All 10 surveyed state plan sponsors reported that prescription drug rebates are passed back to the plans and are used to lower enrollee premiums. Without exception, prescription drug rebates are used by plan sponsors to REDUCE COSTS AND ENHANCE BENEFITS for enrollees.

See Results from the Employer Rebate Survey

Impact of Medicare Part D Drug Manufacturer Rebates at the Point-of-Sale

How Point-of-Sale Manufacturer Rebates Could Affect Stakeholder Costs

A new report by Milliman shows that over the 10-year period 2022-2031, if all manufacturer rebates were reflected at the point-of-sale in Medicare Part D, total beneficiary premiums could increase by an estimated $28.7 billion (16%) and total Federal government spending could increase by an estimated $59.5 billion.

Read Report on Point-of-Sale Rebates

An overwhelming majority of seniors report increased Medicare Part D premiums would hurt them financially.

85% of seniors said that increasing Medicare Part D premiums would have an impact on their personal financial situation.
(Morning Consult/Coalition for Affordable Prescription Drugs)

“The president is deeply committed to protecting America’s seniors,” Azar said. “He does not want any risk that any action could cause seniors’ premiums to increase.”

– Alex Azar, Health and Human Services Secretary
(Politico)

 

Why now, during a pandemic and economic downturn, would the White House add costs to seniors and taxpayers?

The Administration is gutting tools for negotiating lower drug prices.

  • Medicare drug premiums could increase 25%

  • Taxpayer costs could increase up to $400 billion

PCMA Infographic - Premium Impact of Disallowing Rebates in Medicare Part D

TV ADS:

“Simply trying to eliminate rebating without any other steps threatens to drive up drug prices overall…Rebates are a key mechanism that insurers use to try to reduce net drug prices.”

– Aaron Kesselheim, Associate Professor of Medicine, Harvard Medical School
(Read more quotes: Coalition for Affordable Prescription Drugs)

 

DIGITAL ADS:

‘‘The concern remains that this move fails to address the root cause of high prescription drug costs which starts with list prices set by drug manufacturers…The proposed rule risks destabilizing Part D premiums for seniors.”

– Allyson Y. Schwartz, CEO, Better Medicare Alliance
(Read more quotes: Coalition for Affordable Prescription Drugs)

 

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