UnitedHealthcare broadens direct drug rebate program
The nation’s largest health insurer is expanding a program that passes rebates from drugmakers directly to the people that use their medications.
Beginning next year, all new employer-sponsored health plan customers that use UnitedHealthcare must give discounts they get for including certain drugs in their lists of covered medications directly to consumers at the point of sale.
Pharmacy benefit managers typically get rebates from pharmaceutical companies to help offset the high initial prices set for many drugs. Those rebates are then often passed on to companies that sponsor employee insurance plans and are used to reduce premiums or offset other plan costs.
But those high list prices can hurt the patients filling the prescription because what they have to pay for the drug out of pocket is based on that initial list price, not the cost of the drug after rebates.
UnitedHealthcare said about a year ago that rebates would start shifting directly to the customer filling prescriptions for people covered by employer-sponsored health coverage that is fully insured. That’s generally small employers. The insurer said that the initial program lowered drug costs by an average of $130 per prescription.
UnitedHealthcare said Tuesday that its expanded requirement does not apply to existing employer customers that do not already give rebates directly to the consumer.
These rebates have become a growing point of contention as the cost of medical care and prescription drugs soars.
Drug companies pay rebates to make sure their medications are covered, and the federal government has said those hidden rebates can amount to up to 30 percent of a drug’s list price.
Health and Human Services Secretary Alex Azar has pushed to turn them more into upfront discounts the customer gets when paying for the drug. He has said that would create pressure on drugmakers to keep prices down.
UnitedHealthcare is the insurance arm of UnitedHealth Group Inc., which is based in Minnetonka, Minnesota.