UnitedHealthcare Says It Will 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 on Tuesday that it would 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 seven 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,” Mr. 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, Mr.
Schumacher 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
drug makers 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 pointed the finger at both insurers and
pharmacy managers for not sharing the rebates with
customers filling prescriptions. The Pharmaceutical Research
and Manufacturers of America, the industry trade group,
rolled out an advertising campaign, “Share the Savings,” last
year to make the case that by passing on the discounts,
plans could significantly lower patients’ out-of-pocket bills.

The group called UnitedHealthcare’s decision “a step in the
right direction.”
Insurers, including UnitedHealthcare, contend that they
already use the money from discounts to lower premiums
for all their customers, and argue the real issue is the high
cost of so many drugs.

But UnitedHealthcare seems to have blinked, signaling what
could be a coming shift away from the system of
convoluted deals struck between the drug companies and
these middlemen, said Adam J. Fein, president of Pembroke
Consulting, a research firm.

Although the new policy will
only affect a fraction of the company’s customers, “it’s one
more step on the path of creating a more transparent
pharmacy supply chain,” Mr. Fein said.