Drug rebates


  1. In my opinion I believe the rebate allows the drug to be purchased at a ‘preferred pharmacy’ for less money. I have a Medicare plan. If I go to the ‘plan’s preferred pharmacy’ I get a zero cost for my 3 month supply of a ‘preferred generic’. If I do not use the ‘preferred pharmacy’ I pay more. This causes confusion for seniors who must find out 1) which insurance company has their drugs in which tier; 2) which is the ‘preferred pharmacy; 3) is that particular pharmacy within a satisfactory distance to purchase the drug.

    Maybe the ‘preferred generic’ fits the particular person’s cost plan, but once you get to higher tiers the insurance companies vary greatly. I could purchase a drug in a tier 3 with one plan (approximately $100 for a 3 month supply) or a tier 4 with another plan at approximately $400 for a 3 month plan. Too many variables. Very stressful for seniors trying to find the plan that best fits their particular situation.


  2. Like so many things in healthcare that I do not understand, this is one of them. If the PBMs are to negotiate volume discounts with Big Pharm on behalf of its clients (businesses, Medicare part D providers, and other insurance companies), then what is the purpose of a rebate? It sounds more like a kickback for the PBMs to steer toward using certain drugs. Shouldn’t the negotiations already have factored in what rebates would be available to the non-insured retail customer when providing the volume discount? Or Big Pharm could just lower the price on the drug instead of offering a rebate. It is very hard to tell if a rebate has been applied because my drugs costs do not drop. Becuase I can’t see any direct benefit from these rebates, this is why it seems more like a kickback.

    Rebates also imply that they are temporary which to me is like Big Pharm is trying to dump drugs on the market or create a market. You would think that market share would be constant until a new drug hit the market and not highly variable. I don’t think thousands of people suddenly have heart disease and then a monthly later either die or are cured.

    If the rebate was only be given directly to the patient, then will that patient choose one drug over another due to either real or perceived discount in price until they are dependent on that drug and are not willing to readily switch at every refill just on price? Will the insurance company and ultimately the employee be charged more in their medical premiums because everybody is depending on the employee to apply for and find all the rebates?

    Are the PBMs accountable to their customers in proving how effective that are at negotiating on their behalf by stating how much they saved from discounts and rebates? Or is it like hospitals, doctors, and labs that overly inflate list prices and are willing to take pennies on the dollars unless you cannot pay? I am sure that businesses only know the total costs as a line item from year to year because there are way too many variables to compare apples to apples from year to year therefore the PBMs only have to be less than the next PBM.

    I guess in the end it all comes down to Big Pharm’s greed to get the most out of the market. Their greed is driven by its stockholders, in other words, me. I just double checked and I do have pharmaceutical holdings in my 401k index funds.


    1. The rebate is to have the drug designated as the formulary drug. Non formulary drugs cost the patient more. Least costly to most is typically


    2. The rebate allows the drug to be placed as a preferred drug on the formulary, sometimes exclusive within a class of drugs. Usually you have generic, formulary (preferred) and non-formulary drugs – least costly to most costly for the patient in terms of co-pay.


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