The Impact of Sharing Manufacturer Rebates for Oral Anti-Diabetic Medications at the Point of Sale with Patients in the Commercial Market

The Centers for Disease Control and Prevention estimates that 13% of all U.S. adults have diabetes, and even more meet the criteria for prediabetes. Diabetes affects nearly 10 million commercially insured patients in the U.S. and poses significant human and economic risks to those patients and society. A study commissioned by the American Diabetes Association reports that diagnosed diabetes cost the nation $327 billion in 2017, including $237 billion in direct medical costs and $90 billion in reduced productivity.

High out-of-pocket costs for diabetes medicines are key barriers to taking prescribed medicines that can reduce the risk of diabetes complications, hospitalization and emergency visits, and associated healthcare costs. Prior research has also demonstrated that sharing manufacturer rebates for diabetes medicines could reduce patient out-of-pocket costs by up to 40% and improve medication adherence.

Sharing negotiated rebates with patients could reduce overall healthcare spending (inclusive of OOP and plan to spend) by $8 billion over the next 10 years, including $1.5 billion in lower patient costs, with the greatest relative impact affecting select non-white populations. These estimates are conservative and exclude approximately 20-30% of OAD users who also use insulin.

Key findings discussed in the report include:

• Coverage of prescription drugs in commercial insurance plans and cost of diabetes medications on rebates or discounts provided by the manufacturers

• Proposals to pass through rebates to patients at the point of sale and how the net prices of the brand drugs include rebates and discounts provided by the manufacturer

• Impact of passing through negotiated rebates for OADs on OOP cost per fill and focused analysis on HDHPs and PPO

• Impact of passing through negotiated rebates on OAD adherence and the demand sensitivity to OOP costs for prescription medicines influenced by race/ethnicity and insurance type

• Impact of passing through negotiated rebates for OADs on annual OAD spending and the total annual OAD spending per capita before and after shared OAD rebates

• Impact of passing through negotiated rebates for OADs on medical spending

• Impact of passing through negotiated rebates for OADs on projected 10-year medical costs

• Impact of increase OAD adherence on expected mortality