Amid a clash between pharma and payers over high U.S. drug prices, leading payer UnitedHealthcare is planning to offer rebates directly back to millions of patients—a move that addresses a top criticism from the drug industry.
UnitedHealthcare plans to offer more than 7 million fully insured members negotiated discounts starting on January 1, 2019, allowing them to save anywhere from "a few dollars" to more than $1,000 per year, CEO Dan Schumacher told the New York Times.
As drugmakers have taken heat over high drug prices, they have tried to deflect criticism by pointing to rebating strategies at PBMs as the culprit. Pharma has said patients don't benefit from tough behind-the-scenes negotiations that drive down prices, and that it's sometimes unclear where the rebates go. UnitedHealthcare's parent group owns the PBM OptumRx.
Eli Lilly CEO David Ricks recently suggested direct-to-customer rebates as one idea to fight high U.S. drug prices, along with value-based pricing.
In turn, PBMs have said their negotiations save the healthcare system billions of dollars and that drug companies always set their own prices.
UnitedHealthcare said rebates already provide cost relief to the entire healthcare system, but the new approach will provide individual customers savings.
Not all drugs come with rebates, according to the Times. Members can see the price of their drug—including the rebate amount—before going to the pharmacy or placing a delivery order, according to a release.
Rebating has been a contentious topic in the drug industry for years, and the Trump Administration recently suggested shakeups to Medicare Part D to allow beneficiaries to access rebates paid out by drugmakers. PCMA, the organization that represents pharmacy benefit managers, said the proposal "runs contrary to the Administration’s goal to reduce drug costs."
The group said the change would increase premiums for all seniors and only benefit a subset of patients on certain medications.