Population Health

July 20, 2021

Researchers have established a link between drug rebates and higher costs to patients

Image of prescription drugsHealthcare spending in America has remained a prominent topic of debate, with much concern over the rising list prices and out-of-pocket costs for patients seeking prescription drugs. Associated with these increasing costs is the industry practice of using rebates to lower drug costs for insurers.

A University of Washington-led study examined cost and price data on more than 400 branded drugs. The researchers uncovered a positive association between rebates and increases in out-of-pocket costs for patients. Prices increased by an average of $6 for those with commercial insurance, $13 for Medicare patients and $39 for the uninsured.

The increase in drug costs directly impacts patient health, with higher costs prompting patients to use their prescribed drugs less frequently. This leads to worsened health outcomes, particularly among those without health insurance.

The researchers also found that study participants without insurance were more likely to have poorer health and more likely to be in racial minority groups. These findings reiterate concern over racial disparities in access to healthcare.

Learn More >