Do PBMs negotiate rebates with manufacturers? Do aggregators share rebate accounting with their PBM customers? Some say yes, some say no. Who’s right?
By Bill Rusteberg
There’s been discussion on Linkedin about whether PBMs can provide detailed rebate settlement accounting for plan sponsors.
“They can’t provide rebate details!” said one self-declared expert who must be because he said he was. Without trepidation I responded back “Change “can’t” to “won’t” adding “PBMs know exactly what each rebate is for each prescription dispensed.”
Throwing red meat out there to see what happens often exposes the truth whether false or not.
His response? PBMs can’t provide plan sponsors with a detailed listing showing the amount of rebates for each prescription dispensed because “they do not get detailed data from aggregators.”
“There must be a semantics-based communication issue at stake here where we are either both right or wrong, or something in between” I thought. “Time to get critical thinking skills in play here.”
Common sense dictates otherwise. The central questions is “Do PBMs negotiate rebates with manufacturers?” If they do they must necessarily know what the rebates are.
PBMs contract with Aggregators. Aggregators collect rebates for PBMs. There must be an accounting of each settlement otherwise the PBM won’t be able to audit each transaction for accuracy. (TRANSLATION: They won’t know if they’re getting screwed). That’s good basic American business practice.
Some aggregators are owned by PBMs. For instance, VytlOne (formerly Maxor), owns Gateway Health Partners. In cases of common ownership there is no doubt as to the outcome of this debate.
The central question is “Do PBMs negotiate rebates with manufacturers?” According to others who seem to know what they’re talking about the answer is YES:
- “Traditionally, pharmaceutical companies pay a negotiated rebate…..”
- “Negotiating drug rebates with pharmaceutical manufacturers: PBMs’ ability to influence drug utilization through formulary structure (“shift share”) enables them to negotiate discounts/rebates off list prices of branded drugs from pharmaceutical manufacturers.”
- “PBMs negotiate rebates with brand manufactures in return for preferred formular placement and increase in market share of their drugs. PBMs contracts with plan sponsors usually specify the percentage of rebates retained by the PBM vs. passed through to the sponsor.”
Will PBMs provide a detailed line-item accounting of each rebate received upon a plan sponsor’s request? The answer is NO in almost all cases although in the past we have been able to obtain (unverified) rebate amounts on specific high-cost prescriptions but only after much consternation and waffling by the PBM.
“You want WHAT Bill? Tell me again why you need it” said the PBM
The only common-sense conclusion dictates PBM’s “can” but “won’t” disclose rebate details.
What’s your opinion? And can you prove it? If you can it’s not an opinion anymore.
We’ve learned over the years that when a vendor won’t let you see something you’re probably paying more than you should.
