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The illusion and cost of drug rebates | Washington Times

President Trump and every declared candidate for the presidency want to lower drug costs. And, surprise, it’s the president who has made a bold move toward a workable free market solution.

His new proposal cracks down on the price-gouging practices of middlemen in the drug supply chain — Prescription Benefit Managers (PBMs), the mega-corporations that insurers employ to administer their drug benefits.

These rebates aren’t pocket change. By one estimate, the average rebate knocks off nearly 40 percent of a brand name drug’s list price. That’s billions of dollars annually.

In theory, these savings should flow down to insurers and beneficiaries and result in lower out-of-pocket pharmacy costs. But that isn’t how it’s working. The reality is a preference for higher-priced products and anti-competitive behavior that blocks access to other medications.

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The illusion and cost of drug rebates – Washington Times.

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