Are Drug Rebates Working For Your Clients or Against Them?

Top 3 Things You’ll Learn

  • Two examples of low-hanging fruit in evaluating your clients’ rebate arrangements
  • How low clinical value medications distort the drug rebate picture
  • Why DAW-9 codes can be costing your clients more than you think

Prescription drug rebates receive a lot of scrutiny in the marketplace today, and a lot of it is well deserved because you can have prescriptions and rebates driven in a way that is not beneficial to the end client. Rebates actually can be detrimental in some ways to your clients’ pharmacy benefits plans.

Filling an Rx for $2,500 low clinical value drug, even with a $500 rebate, is not a good deal for your clients when realistically those members could have gotten the drugs for $10.

This typically happens through two different mechanisms:

  • Low Clinical Value Medications – These medications typically don’t have a place in therapy today. They’re typically a combination of two over-the-counter medications that have been patented and rebranded as a different product. These can be extremely high in cost and often are highly rebateable. Your clients may have members filling prescriptions for a $2,500 low clinical value drug, and while they may be getting a rebate on that drug – maybe $500 or $600 – realistically, those members could have gotten the drugs for $10. This example highlights the importance of identifying those low clinical value medications impacting your clients’ pharmacy benefits plans.
  • Dispense as Written Drugs (DAW-9) – A DAW-9 occurs when a plan excludes a generic medication in favor of the brand version to benefit from a potential rebate on that medication. The pharmacy is instructed to dispense the prescription as written, but some of these situations require a closer look at the specific drugs affected. There are some situations where the cost of the brand drug minus the rebate is actually is lower than the cost for the generic. However, there are also many times when this is not the case, when the cost of the brand drug minus the rebate is not offsetting the cost for filling the generic version.

These examples represent the low-hanging fruit that you can look at to see if your prescription drug rebate contract is all it’s made out to be.

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