What is a Drug Reimbursement?

Ken Black
Ken Black
Reimbursement occurs when the drug company or the patient is fully paid for othe cost of the treatment by the insurance company or other third party.
Reimbursement occurs when the drug company or the patient is fully paid for othe cost of the treatment by the insurance company or other third party.

A drug reimbursement denotes a situation where either a drug company is paid by a third party for all or part of a prescription, or where a third party repays the consumer a portion or all of the prescription's price. Various insurance companies may handle the process in different ways, and in some cases it may depend on the drug's manufacturer. A drug reimbursement is often a benefit of a medical insurance plan, though not all plans offer prescription drug benefits.

Within the general category of medical reimbursements, a pharmacy reimbursement is related to a drug cost.
Within the general category of medical reimbursements, a pharmacy reimbursement is related to a drug cost.

In cases where the drug manufacturer is reimbursed, the consumer is responsible for doing very little other than going to the location and picking up the medicine. Depending on the plan, the consumer may need to offer some money toward the cost of the prescription known as a co-payment. The pharmacy then handles the rest of the transaction by turning in a claim to the insurance company noting the drug of choice, the prescription, date filled, and other relevant information. This may be done either in paper form or via electronic network.

Not all companies offering a drug reimbursement will make all drugs available under the plan.
Not all companies offering a drug reimbursement will make all drugs available under the plan.

For drug reimbursement plans that rely on the patient to handle the claim, the patient generally must pay the entire cost of the prescription up front. This can create at least a temporary hardship for the patient until the money is reimbursed. Often, this may be a method insurance companies choose to encourage a patient to take a generic medication, which will create less temporary out-of-pocket expense for the patient and the insurance company. The turnaround for the drug reimbursement can vary with each company and the amount of claims being processed.

A drug reimbursement is often a benefit of a medical insurance plan, though not all offer prescription drug benefits.
A drug reimbursement is often a benefit of a medical insurance plan, though not all offer prescription drug benefits.

No matter which method is being used, the general trend in drug reimbursement strategies is to encourage the use of more generics. This can significantly cut down on the costs to the insurance companies. For example, in the second quarter of 2009, the average price of a brand name drug was approximately $143 US Dollars (USD). The generic equivalent cost $20.48 USD on average. In addition to the strategy of making the patient pay for the costs up front, some drug companies encourage the use of generics by only paying a small portion of a name brand drug if a generic is available, versus paying for all or nearly all of the generic.

A prescription that must be regularly filled is more likely to receive a reimbursement than a one-time dosage.
A prescription that must be regularly filled is more likely to receive a reimbursement than a one-time dosage.

Not all companies offering a drug reimbursement will make all drugs available under the plan. For example, some drugs may be considered enhancements to quality of life, and therefore be optional and not subject to reimbursement. Certain insurance providers may also have relationships with certain drug manufacturers, and have exclusive benefits with those manufacturers. Moreover, newer drugs must usually go through an evaluation process before being subject to reimbursement. Those unsure of what their drug reimbursement plan offers should check with their insurance companies before filling a prescription.

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    • Reimbursement occurs when the drug company or the patient is fully paid for othe cost of the treatment by the insurance company or other third party.
      Reimbursement occurs when the drug company or the patient is fully paid for othe cost of the treatment by the insurance company or other third party.
    • Within the general category of medical reimbursements, a pharmacy reimbursement is related to a drug cost.
      Within the general category of medical reimbursements, a pharmacy reimbursement is related to a drug cost.
    • Not all companies offering a drug reimbursement will make all drugs available under the plan.
      Not all companies offering a drug reimbursement will make all drugs available under the plan.
    • A drug reimbursement is often a benefit of a medical insurance plan, though not all offer prescription drug benefits.
      A drug reimbursement is often a benefit of a medical insurance plan, though not all offer prescription drug benefits.
    • A prescription that must be regularly filled is more likely to receive a reimbursement than a one-time dosage.
      A prescription that must be regularly filled is more likely to receive a reimbursement than a one-time dosage.
    • Most drug reimbursement plans encourage the use of generic medicines.
      Most drug reimbursement plans encourage the use of generic medicines.
    • Some doctors may be able to offer free samples of prescription drugs in order to cut costs for patients when reimbursement is not an option.
      Some doctors may be able to offer free samples of prescription drugs in order to cut costs for patients when reimbursement is not an option.