Joshua Fredell, Pharm.D., on Rebates and Driving Down Drug Costs | PBMI Innovators

As drug prices continue to climb, health plans are looking for every available tool to keep costs down. According to Joshua Fredell, Pharm.D., senior vice president at CVS Caremark, rebates remain a key part of the equation.

Fredell was recently named one of the winners of Managed Healthcare Executive’s inaugural PBMI Innovator Award. The recognition highlights leaders who are shaping new strategies in the complex and fast-changing pharmacy benefit market (PBM).

In a recent conversation, Fredell discussed how health plan clients view rebates and the role they play in lowering drug costs. He shared that most clients today are less concerned about the mechanism and more focused on achieving the lowest possible net cost for prescription drugs.

“The vast majority of clients today understand that in today’s U.S. market, rebates are one means to lower the net cost of drugs today,” Fredell said. “The majority of our clients want to make sure they have a plan that is getting to a lower net cost position.”

He added that clients are okay methods such as rebates, “they’re okay if it’s through lower list prices, because at the end of the day they are trying to provide the most affordable benefit for themselves and for their members.”

Fredell explained that while rebates remain an important tool, health plans also welcome opportunities to achieve savings through alternative approaches, such as lower list prices and the adoption of biosimilars.

For example, generic drugs and biosimilars typically come to market at lower list prices, providing another option to reduce overall spending. CVS Caremark has also worked to advance these options, including launching biosimilars that offer clients a direct route to savings.

Still, rebates remain a central feature of today’s drug pricing system.

Fredell noted that many clients will continue to rely on them when they provide the best opportunity for savings. What matters most is flexibility, he said, ensuring that health plans can access whichever option delivers the lowest cost while preserving affordability for members.

Fredell’s beliefs reflect the overall challenge facing PBMs: balancing immediate savings through rebates while also supporting long-term shifts toward a pricing system that relies less on them.

His recognition as a PBMI Innovator highlights the importance of that balance in the evolving pharmacy benefit landscape.