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Comment & Response
August 2018

Considering Pharmaceutical Rebates—Reply

Author Affiliations
  • 1Cardiology Division, Department of Medicine, Duke University Medical Center, Durham, North Carolina
  • 2Duke Clinical Research Institute, Durham, North Carolina
  • 3Telehealth eICU, Baptist Health South Florida, Miami
  • 4Center for Outcomes Research and Evaluation, Section of Cardiovascular Medicine, Yale School of Medicine, Yale New Haven Health System, Yale University, New Haven, Connecticut
JAMA Intern Med. 2018;178(8):1140-1141. doi:10.1001/jamainternmed.2018.3047

In Reply We appreciate Johansen et al raising the critical issue of varying levels of rebates offered via pharmacy benefit managers (PBMs) to pharmacies and payers, and associated challenges with robust estimation of payer-level expenditure related to specific pharmaceutical products. We used similar methods employed in prior studies leveraging Medical Expenditures Panel Survey data to estimate potential national level savings for both total and/or associated out-of-pocket costs with potential substitution of branded drugs with generic medications.1,2 The complexity of rebates makes it difficult to assume the true impact of these existing rebate agreements between PBMs and insurers. By tying rebates to claims rather than drugs, PBMs elude transparency by not having to account each rebate for each drug.3 Pharmacy benefit managers also conceal the amount they save with each rebate, returning only the guaranteed rebate amount to the manufacturer.3 In some instances, the amount of rebate pocketed by the PBM can be greater than the total cost of the drug.4 Additionally, these pervasive agreements may actually increase national health care costs due to barriers in access for generic drugs.5 If the goals are truly to pass cost-effective options as well as savings to consumers (patients and payers) and enhance transparency, drug manufacturers are better off eliminating these rebate programs and lowering costs directly at point of sales. Furthermore, we agree with the assertion by Johansen et al that company drug-specific financial statements may not equate to national expenditure, even when rebates may be accounted for because of sales to wholesalers that may not have subsequently been purchased by pharmacies in those specific years. Finally, Johansen et al point to our finding of higher out-of-pocket cost for Lipitor vs generic atorvastatin in 2014, which has been previously reported on by other sources and which is a difference that was not noted in subsequent years given that Pfizer stopped investing in those price-reduction programs beyond 2014.6 In summary, given the proprietary and complex nature of rebates, there is no reliable measure to estimate them, which is why the majority of analyses do not perform such calculations. Furthermore, accounting for these rebates might lead to a false underestimation of the costs associated with these drugs borne by the entire health system.

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