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 7 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,” 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, 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 drugmakers 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 been pointing the finger at both insurers and pharmacy managers for not sharing the rebates with customers filling prescriptions. Insurers contend that they spread the money from discounts to lower overall premiums, and they argue that the real issue is the high cost of so many drugs.

But even the existence of rebates underscores how convoluted the deals are that have been struck between the drug companies and these middlemen. The amounts can vary widely, with some drugs, like Humira and Enbrel that treat rheumatoid arthritis, being deeply discounted. Others, like medicines for rare conditions where there is no significant competition, have little to no rebates.

When the Trump administration recently floated the idea of requiring private drug plans under Medicare to pass on the savings to consumers at the pharmacy counter, for example, the insurers said this would result in significantly higher premiums for everyone. UnitedHealth Group, UnitedHealthcare’s parent, came out against the Medicare proposal because it is fundamentally a different program, Schumacher said.

In the plans the insurer offers through employers, “the premium impact is minimal; the benefit to the individual is meaningful,” he said.

Employers who self-insure already have the option of passing the savings onto customers of UnitedHealthcare, Schumacher said. CVS Health, a large pharmacy benefit manager, also allows employers to share the discount with their workers and has offered rebates to its own employees since 2013. OptumRx also offers the option of sharing the discount directly with consumers.

But while some employers seem interested, it has not taken off, Schumacher said.

“We have some customer interest,” he said. “It’s in the early innings.”