The Real Deal with Rebates

Rebates: The Real Deal

PBMs may be guilty of promoting the highest costing drugs, not necessarily the best drug for the patient. It is no secret that drug companies have paid PBMs to promote the use of brand name, more expensive drugs. These drugs are only offered by one manufacturer and do not have generic alternatives.

 All prescription plans have what is called a formulary. A formulary is a list of drugs that your insurance will cover. Some of these drugs are preferred. Often, PBMs will create this formulary preferring the more expensive brand drugs so that they can profit from the rebates. This is known as rebate pumping. This was a significant source of PBM profits, but with more and more drugs going generic, they now have to find other ways of boosting their income.