Eliminating pharmaceutical rebates: a wild goose chase?

October 23, 2020

In July, the Trump administration restated its intention to remove rebates for Medicare Part D drugs as one of several new Executive Orders aimed at lowering prescription drug costs. As the 2020 election approaches, one of the key areas of focus for both parties is how to make healthcare costs more affordable for patients, particularly the cost of prescription drugs.

In this article for The Pharma Letter, Matt Majewski and Andy Parece offer an alternative proposal to eliminating manufacturer rebates that could achieve the administration’s objective of lower drug costs for patients without fundamentally altering the existing model: setting patient co-insurance levels based on the average sales price (ASP). This would not require abandoning the pharmacy benefit manager (PBM) rebate model and price negotiation in managing formularies. This alternative would provide more transparency to patients and other stakeholders about the actual costs of their prescription drugs.

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