Third-party payers' benefit designs remain a significant barrier to addressing drug costs. Many continue to use the ever-growing rebate dollars of the gross-to-net bubble to offset overall plan costs rather than reducing patient’s out-of-pocket spending.
Point-of-sale (POS) rebates are one possible benefit design solution. POS rebates directly share with patients the discounts that PBMs negotiate with manufacturers.
A recent survey of large employers by the National Business Group on Health (NGBH) suggests this change may be coming. The survey found that about one in five large employers is using point-of-sale (POS) rebates in their pharmacy benefit plans. The survey found that a further 40% of employers are considering POS rebates for 2021 and 2022.
Pharmaceuticals are the only part of the U.S. healthcare system where the difference between list and net prices is monetized as rebates and redistributed by intermediaries to payers. But we’ve seen that moving to a world without rebates may not be possible, given the drug channel’s entrenched interests and payers’ established economics.
POS rebates may therefore be our most realistic chance for addressing the drug costs of patients trapped in the gross-to-net bubble. Commercial payers and Congress (for Medicare Part D) should get started ASAP with POS rebates for insulin—a highly rebated and massively distorted therapeutic category.
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