Written By Jen Proudfit, Executive Director of Sales and Business Development
Pharmacy rebate management can be a game-changer for managing drug costs and optimizing savings, with some rebate values for brand-name drugs exceeding 30-50% of list price. Yet, many organizations neglect to regularly review their rebate payments to ensure they align with their contract terms. Without reconciliation, you risk leaving money on the table, encountering delayed payments, or finding yourself unprepared for contract renewals.
Regardless of whether your rebates are managed through a full-service PBM or a rebate submission partner, taking a structured approach to compare expected versus actual rebate value is essential.
Understanding Your Contract Basics
The first step in effective rebate reconciliation is understanding the type of rebate arrangement you have in your contract. Different structures impact how rebates are calculated and paid:
- Pass-Through: A rebate agreement in which the full rebate value is collected from the manufacturer and passed through to the plan sponsor, ensuring maximum transparency.
- Flat Per-RX Guarantee: A rebate agreement in which a set rebate value is applied for each eligible brand prescription, providing more predictable payments.
- Hybrid: A combination of a per-RX guarantee or pass-through applies, balancing predictability with a potential for higher returns.
While each structure has its nuances, the goal remains to ensure you receive the rebate value you are owed. Fully understanding your rebate structure helps you:
- Accurately calculate expected rebate payments based on your unique claims data
- Identify discrepancies between what you’re owed and what you’ve been paid
- Pinpoint areas where adjustments might be triggered, such as changes in formulary or utilization
Gaining Clarity on Your Rebate Payments
By clearly defining your contract’s rebate structure, you can better reconcile payments, ensure transparency, and address discrepancies quickly and effectively. Looking for a partner to help you optimize your rebates or a complimentary review of your current rebate solution? Contact us today for more information.
Looking for a partner to help you optimize your rebates or a complimentary review of your current rebate solution? Contact us today for more information.
