Understanding the Fundamentals of Prescription Drug Pricing and the Supply Chain

Prescription drug prices are a top public policy issue today, with multiple proposals to lower costs under consideration. The pharmacy supply chain and pharmacy payment system are complex and involve many stakeholders. The only thing we know for sure: that almost no one pays the publicly listed price of the drug. This session is designed to provide an overview of the fundamentals of prescription drug pricing and how money moves through the supply chain. This understanding is necessary to critically evaluate policy proposals and their potential impact on patients and payers.

Learning Objectives

At the completion of this activity, participants should be able to:

  • Explain the prescription drug supply chain, including how both products and money move through the supply chain.
  • Understand how manufacturer rebates are used today and how manufacturer rebate reform may impact patients and payers in the future.
  • Summarize the differences between prescription drug payment between the pharmacy benefit and medical benefit.
  • Evaluate several pending public policy proposals and their potential impact on prescription drug prices.

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