CRA Insights

Eliminating pharmaceutical rebates: where do we go from here?

September 4, 2019

Significantly changing key elements of the US healthcare system can be effective and in the best interests of patients, but sometimes such changes are ill-advised. The Trump administration’s proposal to lower patients’ prescription drug costs by eliminating manufacturer rebates to federally sponsored prescription drug plans was ultimately abandoned.

In this Insights, the authors discuss an alternative proposal that might accomplish the Administration’s objective of lower patient costs without fundamentally altering the existing model. Under this proposal, more equitable patient co-insurance levels could be set based on average sales price (ASP). This would not require completely abandoning the pharmacy benefit manager (PBM) rebate model and price negotiation in setting formularies, and it would provide more transparency to patients and other stakeholders about the actual costs of their prescription drugs.

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