Pharmacy Reimbursement » Manufacturer Rebate Arrangements Friday, April 18, 2014


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Manufacturer Rebate Arrangements


Pharmaceutical manufacturers pay rebates to pharmacy benefit managers and their customers as part of their formulary contracting agreements. Similar to previous years, 21.4% of respondents were able to share their drug rebate data. New to this year's report are rebate data for retail 90 and for specialty medications. For traditional brand medications, 31% used a guaranteed amount per prescription (or per brand prescription), 40% received a percentage share of rebates (the vast majority having a minimum guarantee), and 11% did not receive rebates (Figure 29). Examined by type of prescription, 44% of arrangements were per prescription, 40% were per brand prescription, and 16% were per formulary brand prescription. For specialty medications, 20% of respondents did not receive rebates, 27% did not know the rebate amount, 22% had a flat guaranteed amount, and 31% received a percentage share of rebates (Figure 30).

Figure 29 Figure 30

The rebate amount can vary by retail and mail pharmacy. For respondents who receive rebates per script, Table 25 shows the range of rebate amounts received per script, along with the average amount for each type of prescription. Trending data show an increase in rebate amounts over time (Table 26). While this survey does not capture rebates for individual drugs, the growth in rebate amount may be due in part to the large number of brands going generic in the next year or two. Increasing rebates to capture market share before losing patent is a common strategy.

Table 25

Table 26

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