Point of Sale Rebate Analysis in the Commercial Market

Sharing rebates may lower patient costs and likely has minimal impact on premiums

Myvideopays October 10, 2017

Pharmaceutical manufacturers often pay significant rebates to pharmacy benefit managers (PBMs) or payers (including plan sponsors and health plans) on brand medications, reducing the cost of pharmacy benefits. Traditionally, pharmaceutical rebates provided to payers are not shared directly with a member; rather, payers use rebates to reduce their overall costs which often lowers member premium rates. Under this approach, a member using brand medications has the same out-of-pocket cost for the prescriptions whether a rebate was received. 

This report by Milliman observes the reallocation in payer costs and member cost sharing relative to a baseline scenario across varying plan designs typically found in the employer market.