Drug Rebate Agreements

Drug Rebate Agreements are contracts between pharmaceutical companies and health insurance programs or pharmacies. Under these agreements, the drug manufacturer offers rebates—discounts or refunds—based on the volume of medication sold or specific utilization targets. These rebates help lower the overall cost of drugs for insurers and Medicare Part D plans, making medications more affordable for patients. The agreements are designed to incentivize the use of certain drugs and manage drug costs effectively, with the rebates often passed on indirectly through reduced premiums or out-of-pocket expenses.