There’s been a discussion this week on Linkedin about whether PBMs can provide detailed quarterly rebate settlement accounting for plan sponsors.
“They can’t provide rebate details!” said one self-declared expert. I responded back “Change “can’t” to “won’t” adding “PBMs know exactly what each rebate is for each prescription dispensed.”
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. If PBM’s negotiate rebates with manufacturers they must know what the rebates are. Aggregators are often used to collect the rebates for the PBM. There necessarily must be an accounting of each settlement otherwise the PBM won’t be able to audit each transaction for accuracy. 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?” 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 get rebate amounts on specific high-cost prescriptions after much consternation and waffling by the PBM.
The only common-sense conclusion dictates PBM’s “can” but “won’t” disclose rebate details.
We’ve learned over the years that when a vendor won’t let you see something you’re probably paying too much.
