UnitedHealth Expands Drug Rebate Program to Consumers

UnitedHealth Expands Drug Rebate Program to Consumers

UnitedHealth, the country’s largest health insurer, said Tuesday it would expand a program that passes drug manufacturer rebates directly to consumers, the Associated Press reported.

Starting in 2020, new employer-sponsored health insurance coverage that used UnitedHealthcare and pharmacy benefit manager OptumRx, also a division of UnitedHealth, would have to include point-of-sale pharmacy discounts.

The trial program started January 1, 2019, and so far has resulted in an average of $130 per eligible prescription, says UnitedHealth. According to a company analysis, when there are no large out-of-pocket drug costs, patient adherence to a medication plan improves by 4% to 16%.

Drug rebates have become a contentious issue in prescription medicine costs. Drug manufacturers frequently maintain high list prices and then pass along discounts, rebates, and other fees to pharmacy benefit managers, or PBMs, which often retain the money and leave consumer pricing as it was. CVS Health announced a similar program in December 2018 through its pharmacy benefits manager division, CVS Caremark. OptumRx, CVS Caremark, and Express Scripts, a third major PBM, together control 85% of the market.

But it isn’t clear whether such an arrangement will help restrain the total cost of U.S. health care, which has the highest per capita costs of any country in the world. While U.S. average drug prices are highest compared to other countries, out-of-pocket costs are more moderate. That’s because insurance covers a larger portion of the bill. The difference is then passed on to consumers in monthly insurance premiums and higher taxes.

Given premium increases—the average premium cost for employer-based family coverage rose 5% in 2018 according to the National Conference for State Legislatures—much of the apparent cost reduction might be passed on in other forms.