Drug Price Negotiations & Rebates

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One of the most important functions performed by PBMs is obtaining discounts on drugs for health plans and patients through the negotiation and administration of manufacturer purchase and rebate agreements. PBMs are able to lower drug spending by negotiating price discounts from pharmacies, by negotiating discounts from wholesalers, and by negotiating directly with drug manufacturers for purchase discounts.

Competition among drug products depends on the number of alternative therapies available within each therapeutic class. In classes where several products may be considered therapeutically equivalent, PBMs can negotiate with drug manufacturers for higher rebates, which in turn benefit patients and payers.

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2015 Trend Report

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