Rx Rebates: Let’s Break It Down

In a system as complex as health care, it’s tempting to zero in on one problematic element and try to at least fix at least that. Right now, there’s a lot of focus on the high cost of drugs, and – zooming in even closer -- on the role that rebates may play in driving up cost. The process that gets us from the initial list price of a drug to the amount that employers and consumers actually pay is convoluted and inconsistent. This New York Times article provides a nice, straightforward explanation of how rebates work and why they have become so central in drug pricing in recent years -- and why the Trump administration and even a major pharmaceutical industry group are calling for that to change. But, as Mercer’s pharmacy practice leader David Dross states in the article, curtailing rebates will increase employer costs in the short run. In the long run? Like we said, it’s complicated. You can read David’s longer post on the rebate issue here.

Beth Umland
by Beth Umland

Director of Research, Health, Mercer

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