UnitedHealthcare to Expand Consumer Drug Rebates

Earlier this year, UnitedHealthcare’s PBM, OptumRx, introduced a unique point-of-sale drug discount program to members enrolled in UnitedHealthcare fully-insured plans.

Those discounts stemmed from passing through net costs of drug rebates directly to consumers-traditionally, payer organizations like UnitedHealth would combine any and all discounts received from pharmaceutical manufacturers and then incorporate those savings into a particular health plan’s premiums. This new approach, however, is popular enough that the PBM recently announced it planned to expand the program to all new employer-sponsored plans, including self-employed plans, next year.

Andy Cournoyer, vice president at Precision for Value, a payer analysis and consulting firm, said the desire to offer more transparency in drug pricing, as well as more support for patient affordability, are key drivers for these kind of rebate plans at the point of sale.

“We see this push and pull argument pointing fingers at who is to blame for high drug pricing, the drug companies or the insurance companies,” he says. “PBMS can capture these rebates to help control drug costs because their business models are not quite as dependent on them as one might think. It’s the kind of move that shows consumers that the plans are really trying to manage these drugs costs and help patients save money.”

UnitedHealthcare reports, on average, that patients can save an average of $130 per eligible prescription. While the number of patients who are impacted by the discount may be smaller than expected, as the discounts only cover brand-name drugs, with the highest costing brands yielding the highest savings, Cournoyer says that it is a program that consumers do appreciate. Yet, there is some concern that employers may push back on the program expansion, especially those who choose the self-insured plan option.

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“It comes down to control,” he says. “In the past, those employers were likely to save on premiums. Or they might get the rebate check at the end of the fiscal period. In the case of these expanded programs, they won’t get that rebate check. And, if they’re the ones managing the risk, and they are getting that check, they then have some control over what happens with that money. They may even use it to offset premiums for their employees over the next year. They don’t have those same options when the rebate is applied at the point of sale.”

When asked if other PBMs are likely to follow OptumRx’s lead, Cournoyer was circumspect. He says the industry remains concerned about the cost of plan premiums in the commercial space and whether fees may be tacked on to services currently offered for free by PBMs, like case management, to help payers recoup lost revenue.

In addition, there is some concern that OptumRx might aggressively manage drug access in order to keep premiums down and make sure rebates don’t take too much of a bite out of their bottom line. There is a lot of give and take in the dynamics of such point-of-sale discounts, Cournoyer says, and it’s not entirely clear how it will all play out.

“One of the biggest takeaways from discounts being shared at the point of sale is that a member’s out-of-pocket costs will be based on the discounted price of the eligible drugs. It’s a sticking point,” he says. “And we also need to consider whether there will be any lost revenue for payers and it’s unclear how they will manage that-because they aren’t going to just absorb those losses.”

Despite those concerns, Cournoyer says he believes these types of programs are likely to become more prevalent in the future.

“Patient affordability, as a theme, is here to stay,” he says. “We came from a world where a patient’s out-of-pocket costs were based on the list price of drugs. Now, with discounts and rebates, that’s changing. PBMs may need to learn new ways to compete for employers while still catering to individual members who are looking at drug cost as a decision point for how they select their benefits. Will they be more affected by out-of-pocket costs or premiums? As payers move forward, trying to better engage consumers and find where the value lies, I imagine we’ll be seeing a mix of both.”

 Kayt Sukel is a science and health writer based outside Houston.