This morning, the White House withdrew its proposed rule to reform the rebate system in federal programs. I am surprised by the timing, which likely has more to do with politics than policy. Tomorrow, I'll post some reflections on this unexpected news.
In the meantime, today's rerun is a reminder of what's still at stake in reforming rebates within the U.S. drug channel
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Click here to see the original post and comments from April 2019. You can also reach this post at www.GrossToNetBubble.com. 😉
The gross-to-net bubble—the ever-growing pile of money that sits between a manufacturer’s list price for a drug and the net price after rebates and other reductions—reached another high last year.
Drug Channels Institute developed the term gross-to-net bubble to describe the speed and size of growth in the total value of manufacturers’ gross-to-net reductions.
We estimate that in 2018, the total value of gross-to-net reductions for brand-name drugs was $166 billion. As you will see below, that figure doubled over the preceding six years. Below, I also highlight the various elements that fill the bubble. About two-thirds of total gross-to-net reductions come from rebates paid to third-party payers.
The gross-to-net bubble reflects—and drives—many of the problems with U.S. drug pricing. However, recent movement toward a world without rebates suggests that we may soon hear this bubble pop.
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