UnitedHealth Group Inc. said it will pass along rebates it receives from drugmakers directly to consumers when they pick up their prescriptions at the pharmacy counter.
UnitedHealthcare said its new policy, which goes into effect Jan. 1, 2019, would lower out-of-pocket costs for over 7 million fully insured plan holders.
"UnitedHealthcare will apply savings from rebates upfront, at the time of sale, to ensure people are paying the lowest amount possible under their plan," the company said in a March 6 statement.
Drugmakers negotiate with insurers and pharmacy benefit managers — often called middlemen — on the amount for rebates.
While the rebate amounts for Medicaid — the government's insurance program for the poor — are mandated at a fixed level, consumers are kept in the dark about how much private payers are getting back.
The move by UnitedHealthcare comes a day after Health and Human Services Secretary Alex Azar threatened that if insurers, healthcare providers, pharmacies and drugmakers fail to provide more price transparency, the government would use its "levers" to force the change.
Azar has insisted that the system incentivizes hiking, not lowering, drug prices.
"Today's announcement by UnitedHealthcare is a prime example of the type of movement toward transparency and lower drug prices for millions of patients that the Trump administration is championing," Azar said in a March 6 statement.
"Empowering patients and providers with the information and control to put them in the driver's seat is a key part of our strategy at the Department of Health and Human Services to bring down the price of drugs and make healthcare more affordable," he said. "We are already seeing clear momentum toward the type of innovation in the private sector that will be an important part of the value-based transformation that is coming to America's healthcare system."
Lawmakers also asked for more transparency and have questioned whether the rebate system is necessary.
The Trump administration has proposed requiring Medicare Part D drug plan sponsors to apply at least one-third of the discounts and rebates they receive from biopharmaceutical companies to the beneficiaries' out-of-pocket spending on their medicines at the pharmacy counter — a proposal that was met with reluctance from insurers.
Mark Merritt, president and CEO of Pharmaceutical Care Management, which lobbies on behalf of PBMs, has said those companies reduce prescription drug costs by 30% by using their substantial scale and expertise to aggressively negotiate discounts and rebates.
Dan Schumacher, president and COO of UnitedHealthcare, which runs its own PBM, OptumRx, said his company is "uniquely positioned to deliver new value and clarity to healthcare and pharmacy benefits in particular."
"The move is part of UnitedHealth Group's broader effort to simplify pharmacy benefits, deliver savings directly to its customers and improve their healthcare experience," the company said. "Expanding access to discounts builds on a history of introducing innovative approaches, products and services that are designed to improve personal health and enable consumers to directly benefit from the full value of their pharmacy benefits."