Last Friday’s Executive Orders, revived the government’s effort to reform rebates in federal programs. Whether that effort succeeds, today's update reminds us what's still at stake in reforming rebates within the U.S. drug channel.
For 2019, Drug Channels Institute estimates that the gross-to-net bubble—the dollar gap between sales at a brand-name drug’s list price and its sales at its net price after rebates and other reductions—reached $175 billion.
The bubble reflects—and drives—many of patients’ problems and misunderstandings of U.S. drug prices.
However, the political and practical challenges to rebate reform remain daunting. Few people grasp the complex economic interplay of patient out-of-pocket spending, cost-shifting, premiums, and payer incentives.
Despite the pandemic, I remain hopeful that we can help this bubble pop.
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