Health Plan Design Solutions


Passing rebates on to plan participants has negligible impact on overall plan costs yet results in greater preventive care and reduced long-term medical costs.

Patient costs are unnecessarily inflated because health plans’ pharmacy benefit managers (PBMs) negotiate large rebates from manufacturers for particular medications but often do not pass the savings on to participants. Rebates on some insulin brands are 70-80% of their cost. The average rebate on a branded drug is 48%. If you don’t pass through the rebate at the point of sale, the patients pay twice what the insurance plan pays for the same drug.

Insulin is a life-sustaining drug for millions of Americans yet the list price on insulin has gone up 143% in the last decade, with a cost exceeding $300 per vial. Many patients need 2 to 3 vials per month. Importantly, the net price of insulin after rebates has actually dropped over 50% during the same prior 10 year period.

There are similar challenges with low-cost generic drugs. Metformin, the most commonly prescribed medication for patients with Type 2 diabetes, can be purchased for $4 at many pharmacies, but many health plan participants must pay a $20 copay for it because of their plan design.


An actuarial study released in January 2022, indicated that passing rebates through yields a very minimal cost increase for health plans (0.4% for most). Notably, this study does not reflect inherent savings of having healthier participants due to better adherence to essential medications. Chronic diseases like diabetes are substantially more expensive when they are not effectively managed. Access to affordable pharmacological therapies is critical to lowering the risk of long term, expensive complications that are the real drivers of overall plan costs related to chronic disease.

When we’ve asked attendees in our educational programs if they pass rebates through, typical responses are: 22% do pass rebates through, 48% don’t, and 30% roughly don't know. This is a low-cost option to reduce your plan risk for participants living with chronic diseases, improve employee morale and productivity. Please consider passing through rebates to patients today.

More details can be found in this article by DLC’s CEO George Huntley on Rebate Pass-Through published by