A new report from Pennsylvania’s Auditor General seeks to shed light on the rising cost of prescription drugs.
The report outlines how manufacturers’ rebates don’t amount to savings for consumers. Auditor General Eugene DePasquale says it’s likely the opposite, because rebates are passed on behind the scenes between the drug maker, the pharmacy benefit manager and insurance providers.
“Rebates can actually drive up the cost of your prescription drugs by as much as 30 percent, meaning your brand-name heart medication, for instance, is likely almost a third more expensive than it needs to be,” DePasquale said.
Why consumers may not notice, DePasquale said, is because rebates are passed behind-the-scenes between drug manufacturers, pharmacy benefit managers (PBMs) and insurance providers – never reaching consumers’ hands, or their wallets.
“In short, manufacturers who are required to offer a rebate on a drug simply set a higher starting list price in order to maintain their profit,” DePasquale said. “It’s practically the same thing as a store marking up the price of an item before putting it ‘on sale’ – the actual savings are illusory, at best.”
DePasquale says his report contains needed reforms at both the state and federal levels, including requiring any rebates go to the insurer, so savings can truly be passed onto the consumer.
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