Two health plans are sharing the wealth—in this case, drug discounts from manufacturers—with consumers at point of sale. Beginning in 2019, Aetna and UnitedHealthcare will enable members of their fully insured plans to reap the benefits of the rebates they receive from pharmaceutical companies.
Aetna’s discounts, which will apply 100% of the rebate, could potentially reach 3 million members, while UnitedHealthcare estimates more than 7 million members will be eligible.
Both insurers already allow self-insured employers to pass along drug company rebates to consumers. However, only about 4% of employers do it, while 68% use the money to offset their spending on drugs, according to a survey of employers by the Pharmacy Benefit Management Institute.
What’s driving the change
Matt Wiggin, spokesperson for UnitedHealthcare, says the insurer sees the approach as an opportunity to help mitigate high drug prices. “Drug costs shouldn’t be challenging even with insurance,” he says. Passing along discounts is also part of UnitedHealthcare’s broader effort to simplify benefits and increase generic use and transparency, he says.
Matt Sturm, associate principal, ECG Management Consultants says the actions by UnitedHealthcare and Aetna are a direct response to growing consumer frustration over drug prices. “They also are setting an example of ‘playing nice’ instead of having to respond to the government’s call for more transparency,” he says.
On March 6, HHS Secretary Alex Azar responded to UnitedHealthcare’s announcement by saying, “UnitedHealthcare is a prime example of the type of movement toward transparency and lower drug prices for millions of patients that the Trump Administration is championing.”
Brian Duffant, vice president, BluePath Solutions, a health economics/outcomes research firm, says two primary dynamics are motivating payers to share rebates: consumer dissatisfaction with high out-of-pocket drug costs and criticism about not sharing rebate savings with consumers that have high-deductible plans, often requiring coinsurance payments on the full gross price as opposed to payers’ actual net price.
Gabriel Levitt, cofounder and president of PharmacyChecker.com in White Plains, NY, which provides online prescription drug prices, says insurers are tired of bearing the brunt of consumers’ frustrations.
“It is clear that what Pharma considers ‘middlemen’—insurers and pharmacy benefit managers (PBMs)—are now the focus of more scrutiny in terms of drug pricing; it wants them to be the new punching bags of the industry.”
He believes that the recent decisions by Aetna and UnitedHealthcare are likely efforts to try and dilute these attacks by providing consumers more savings and avoiding potential legislation demanding transparency in drug pricing.
If insurers pass along drug savings, and the public sees them as real, the finger may be pointed back at Pharma for setting prices so high, Levitt says.
He predicts that if the two new discount programs could help insurers remain competitive, other plans might be tempted to follow suit. He also says that mergers such as CVS-Aetna last year, which virtually eliminated the middleman, might make insurers more willing to pass along rebates.
Next: What discounts will look like