Insurer to pass on rebates from drug companies to consumers

In response to growing consumer frustration over drug prices, UnitedHealthcare, one of the nation’s largest health insurers, said Tuesday it will stop keeping millions of dollars in discounts it gets from drug companies and share them with its customers.

Dan Schumacher, the president of UnitedHealthcare, said the new policy will apply to more than 7 million people who are enrolled in the company’s fully insured plans, beginning next year.

“The benefit could range from a few dollars to hundreds of dollars to over a thousand,” Schumacher said.

Not all drugs come with rebates that are paid to the health plan. People in plans with high deductibles who buy drugs that carry large rebates will see the greatest savings, he said.

Insurers like UnitedHealthcare, whose parent company also owns a large pharmacy benefit manager, OptumRx, have come under increasing public pressure as drug prices — especially for brand-name drugs — continue to rise, angering consumers and lawmakers. The decision by UnitedHealthcare is the latest in a series of steps taken by drugmakers and health plans to try to lessen public discontent over drug prices, even as the companies spar over who is to blame.

Aiming to deflect criticism, the pharmaceutical industry has increasingly been pointing the finger at both insurers and pharmacy managers for not sharing the rebates with customers filling prescriptions. Insurers contend that they spread the money from discounts to lower overall premiums, and they argue that the real issue is the high cost of so many drugs.

But even the existence of rebates underscores how convoluted the deals are that have been struck between the drug companies and these middlemen.

When the Trump administration recently floated the idea of requiring private drug plans under Medicare to pass on the savings to consumers at the pharmacy counter, for example, the insurers said this would result in significantly higher premiums for everyone.