Healthcare costs are rising fast, in part, due to the rising prices of prescription medications, which have been blamed in part on price opacity and on pharmaceutical companies’ practice of offering rebates to benefits managers.

Benefits managers typically pocket a portion of the rebates they negotiate with pharma companies for brand drugs, then use the remainder to disincentivize healthcare consumers from switching off to generics. This has the end effect of protecting brand medications’ market share.

But rebating, a new Milliman study charged, may be the lesser culprit in the pharmaceutical market’s disequilibrium. The greater problem may be the dearth of well-positioned challengers.

And that, the group asserted, makes Big Pharma ripe for disruption.

Antiviral, antidepressant, immunosuppressant and other “protected class medications” exhibit the highest price inelasticity; options are typically limited, kept in tight supply and, thus, have consistently high list prices.

“Out of 124 protected class brand drugs,” Milliman found, just “16 drugs (13%) received manufacturer rebates, compared to 36% of brand drugs overall.”

So, it’s not so much that drug rebates aren’t getting passed along from benefits managers and insurers to the end healthcare consumer — it’s that, for many brand drugs, lack of competition may be preventing rebates from being offered to begin with.

Get the full story here, from Modern Healthcare‘s Susannah Luthi.