The combination of rising drug costs at the health system level and increasing financial stress for individual patients has triggered intense national concern. One target has come under particular scrutiny: rebates.

Drug makers in the US face no federal process whereby prices are evaluated in comparison to evidence of clinical benefit, but they must negotiate with a myriad of payers (including both insurers and pharmacy benefit managers [PBMs]). Discounts to the list price of drugs (rendered post-sale as rebates) are negotiated in exchange for preferential formulary placement, which increases sales. Rebate agreements are often quite complex, with the possibility of “stacked” rebates paid to PBMs: combined payments related to formulary placement, variously named administrative fees, price increase protection guarantees, and other programs.

Date of review: December 2018

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Final Documents

Below you will find the final documents from the policy paper review process:

Final Report