How PBMs will fare without rebates

The Trump administration’s recent proposal to eliminate rebates between drug manufacturers and pharmacy benefit managers (PBMs) is not a big surprise to those who have been paying attention to the rhetoric of CMS and HHS officials, but the impact of swapping rebates for direct discounts is still a big question.

The proposal takes a direct hit at a debate that has been rising as healthcare costs climb. PBMs, often referred to as the prescription drug industry’s middlemen, negotiate drug prices between manufacturers and health insurance providers. The savings, or rebates, are pocketed by PBMs or passed directly onto clients.

The opaque system has brought the ire of...