New Study: Substantial rebates negotiated in Medicare Part D

Allyson Funk   |     October 12, 2016   |   SHARE THIS

A new QuintilesIMS Institute research brief takes a first-of-its-kind look at Part D costs after accounting for rebates across 12 therapeutic classes widely used in Part D. This new report confirms the significant negotiation occurring in Medicare.

The study, “Estimate of Medicare Part D Costs After Accounting for Manufacturer Rebates: A Study of Original Branded Products in the U.S.,” found Medicare Part D plans receive an average 35.3 percent discount from manufacturer list prices. This includes supply chain discounts and negotiations with Part D plans.

The findings are consistent with the substantial rebates for brand medicines the Medicare Trustees report has cited for years. Across the 12 therapeutic classes widely used in Part D, net costs to plans ranged from 31 to 54 percent; those costs coupled with rebates and patient cost sharing equal the total list price. And even in a protected class, such as antidepressants, there are substantial rebates of around 34 percent occurring.

This report is further evidence of the robust negotiating power of Part D plans and how they secure rebates and discounts to keep costs low for beneficiaries and taxpayers.

Allyson Funk

Allyson Funk Ally is a former senior director of public affairs at PhRMA focused on advocacy issues for the biopharmaceutical industry. Her expertise includes Medicare, Medicaid, 340B, health reform and more. Prior to PhRMA, her experience included leading health communications for a large membership organization, supporting public affairs clients and working for the governor of Louisiana.

Topics: Part D, Medicare

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