Prescription drug spending per member, before and after manufacturer rebates, grew faster for those with individual plans than for those enrolled in large group plans from 2015 to 2019, according to a new study published May 6 in the JAMA Health Forum.
Researchers at Johns Hopkins University and Texas Christian University looked at pre-rebate and post-rebate annual drug spending per covered member over the five-year period and separately by plan type.
The data came from payers' mandatory medical loss ratio filings for 2015 to 2019, for each state separately, and for the individual, small group and large group markets in each state. The sample includes approximately 2,200 unique health plans.
Five key takeaways:
- Median pre-rebate drug cost per covered life annual increase:
- Individual plans: 68.1 percent, from $734 to $1,234
- Small group plans: 44.9 percent, from $752 to $1,090
- Large group plans: 23.9 percent, from $791 to $980
- Median post-rebate drug cost per covered life annual increase:
- Individual plans: 54.5 percent, from $644 to $995
- Small group plans: 24 percent, from $642 to $796
- Large group plans: 7.6 percent, from $686 to $738.
- Median rebate increases:
- Individual plans: 11.2 percent to 18.7 percent
- Small group plans: 13.3 percent to 22.3 percent
- Large group plans: 13.6 percent to 22 percent
- Regression results identified drug cost per covered life annually as the only plan characteristic significantly associated with rebate percentage across all plan types. As drug cost per covered life annually grew by 10 percent, rebate percentages dropped by 0.3 percent for individual plans, 0.3 percent for small group plans and 0.2 percent for large group plans.
- The consistently negative association between pre-rebate drug cost per covered life per year and rebate percentage may reflect that many expensive drugs with little competition rarely offer large manufacturer rebates.