Price Rebates Will Continue As ‘Fact Of Life’ In Drug Contracting
Pharmacy benefit managers will continue to collect rebates from manufacturers in return for market share even though the practice is being challenged by drug pricing critics, Avalere’s Mendelson predicts.
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Although stakeholders are interested in value-based models that link a drug’s performance to emerging evidence of improved patient outcomes, such agreements are difficult to implement and too limited in scope to drive a shift to value-based reimbursement. The authors suggest a new, structured approach to bring these contracts into the mainstream, thus transforming product reimbursement and fueling the shift from volume to value.
Eli Lilly recorded $7.69bn in rebates and discounts in the US in 2016 as pharmacy benefit managers demanded greater price concessions in crowded categories like diabetes.
Sanofi, Lilly and Novo are the targets, but if lawsuit gains traction, it could put entire PBM rebate model under legal scrutiny.