Evaluating the Role of Rebates on Medicare Formulary Coverage, Market Share, and Patient and Health Plan Spending

The research team at Vanderbilt University seeks to understand the role of rebates in driving formulary design by examining the relationships between average rebate size and Medicare formulary coverage, utilization, and spending by patients and plans. The study will: 1. Document formulary coverage, product uptake, and spending trends in relation to list and net prices for Medicare Part D drugs, including trends following the market entry of generic or biosimilar alternatives. The team also will explore whether drugs with large rebates have more generous formulary coverage and less use of generic or biosimilar alternatives. 2. Explore manufacturers’ strategies with regard to authorized generics, including pricing dynamics, market share, and use relative to traditional brands and traditional generics for the same product. 3. Compare pricing of products in Medicare Part B to similar products in Part D to assess if there are opportunities to save money by moving Part B drugs to Part D coverage. Data for the study will come from the Medicare Formulary file, SSR Health’s Net Sales Price Data, Medicare ASP Part D Net Price Files, and the Medicare 20% claims file.