You have probably seen rebates in the consumer market; you purchase a brand-new television at your local appliance store, you mail in some paperwork, and the next thing you know, you receive some money back. This rebate system is a great way to entice buyers to purchase a manufacturer’s product and the buyer gets a lower cost product in the long run. But what place does a rebate system have in the prescription drug market? Rebates are given to managed care organizations (MCOs), such as health plans and pharmacy benefit managers (PBMs), by prescription drug manufacturers as the most common way to provide lower pricing in a high price landscape like the pharmaceutical industry1

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