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CAPD Statement on New Data Reinforcing that Rebates Do Not Drive High Drug Prices

New research out yesterday from Visante and the Pharmaceutical Care Management Association (PCMA) highlights a seminal point in the drug pricing debate: Pharmaceutical manufacturers alone set the price of prescription drugs. Findings show that even for drugs with no or decreasing rebates, prescription drug prices, set by pharmaceutical manufacturers, continue to skyrocket. In Medicare Part D, prescription drugs with no rebates (roughly 40 percent of those prescribed) saw significant price hikes between 2012 and 2017. In Medicare Part B, where there are no PBM-negotiated rebates, pharmaceutical manufacturers increased the prices of the ten most-used drugs by a range of 16 to 74 percent.

This research comes on the heels of a study by the Department of Health and Human Services (HHS) Office of the Inspector General, which similarly found that even after accounting for rebates, the prices of prescription drugs increased by 62 percent – a dramatic increase from 2011 to 2015.

As we await the Administration’s rulemaking on prescription drug rebates, this data provides a clear directive: the only way to lower drug costs for seniors is to lower drug prices. Eliminating rebates will not lower drug prices, and in fact, would increase costs and cause disruption for the millions of seniors who rely on Medicare Part D. Without rebates, or another equally or more effective discounting mechanism, premiums would jump by more than 50 percent and costs to seniors would increase by nearly $6 billion per year.

We urge the Administration and Congress to address the root cause of high drug prices rather than eliminating an important check on drug company pricing power for seniors and all patients.