Prescription Drug Rebates in Colorado
Prescription drugs represent the fastest rising health care expense in the United States. 2018 Colorado All Payer Claims Database (CO APCD) data shows that approximately 19% of total health care spending across the state went towards prescription drugs. As costs for drugs critical to improving the health of Coloradans continue to rise, consumers, policy makers and others are actively seeking solutions to address prescription drug prices. Prescription drug rebates — or compensation, remuneration and any other price concessions provided by pharmaceutical manufacturers for prescription drugs — are being explored as a method to reduce prescription drug spending and drive down patient out-of-pocket costs.
- The definition of rebates is inclusive of all compensation from manufacturers to payers (through their pharmacy benefit manager or PBM, not solely rebates).
- Rebates take time to be processed and received by payers. As such, 2019 data submitted to CIVHC in September of 2020 may not reflect all rebates that payers will receive for 2019. All drug rebate data is self-reported.
- One large payer did not have the capability to report rebates and spending at the level of granularity required. To address this issue, CIVHC removed this payer’s data from the report.
- Of the commercial payers who use a pharmacy benefit manager (PBM), payers reported to CIVHC that 99% of total rebate dollars were passed through from the PBM to the payer.
- Pharmacy spending throughout the report only includes prescriptions filled through a pharmacy and does NOT include drugs administered by a provider in a hospital or outpatient setting or premium payments made by employers or individuals.
- Across all payers, from 2017-2019, total pharmacy spending without rebates grew 14%, but only grew 11% when factoring in drug rebates.
- Drug rebates as a percent of total pharmacy spending for all payers increased from 25% to 27% from 2017-2019.
- For commercial payers, from 2017-2019, rebates as a percent of total spending increased from 21% to 24% for brand drugs, and increased from 10% to 13% for specialty drugs. In 2019, rebates represented 18% of total spending for brand and specialty drugs combined
- Across all payers, in 2019, specialty drugs represent 39% of pharmacy spending, but only 1% of the total number of prescription drugs filled.