(Reuters) - UnitedHealth Group Inc said on Tuesday that starting next year it will expand its drug discount program to all new employer-sponsored health plans and pass on rebates to consumers.
The move by UnitedHealth and its pharmacy benefits manager (PBM) unit OptumRx comes amid widespread government scrutiny in the United States over the industry-wide system of after-market discounts or rebates.
“It is clear that UnitedHealth is taking the potential industry rebate shift into its own hands and trying to insulate itself from any upcoming regulation or legislation on rebates,” Evercore ISI analysts wrote in a client note.
The health insurer earlier this year began passing the rebates to about 9 million consumers enrolled in health plans, helping them save an average of $130 per eligible prescription.
Existing members would have the choice of adopting this plan during contract renewal, the company said, adding that it will now offer only this option for new customers.
Insurers like UnitedHealth have traditionally combined all the discounts that they receive from drugmakers into one big pool of money and incorporated it when they set a health plan’s premium prices.
But because of rising drug prices, insurers and pharmacy benefit managers have been pressured to give the discount directly to the patient who is buying the drug.
Eliminating after-market discounts has been a key element of President Donald Trump’s administration plan to lower prescription medicine costs. It had in January proposed a rule to end rebates in a bid to lower prescription drug costs.
Drugmakers say they are under pressure to provide rebates to the three PBMs that dominate the market in order to have their drugs included on preferred coverage lists, ensuring patients can access them.
Reporting by Manas Mishra and Mekhla Raina in Bengaluru; Editing by Arun Koyyur