Prescription Drug Rebates, Explained

If you're wondering how rebates for prescription drugs work and why they matter in the debate about lowering drug costs, here's your answer. This video breaks down how prescription drug rebates are determined, who benefits from them, how they affect spending by insurers and consumers, and, of course, the role of pharmacy benefit managers in the process.

The Trump Administration had proposed banning such rebates in Medicare Part D, but dropped the proposal amid concerns that it would lead to higher costs for insurers, consumers and the Medicare program. It is still possible that policymakers could make changes to the rebate system. They are also talking about many other ways to lower drug costs.

The animation is part of a broad collection of KFF analysis and data on prescription drugs.