In his health-care blueprint released last month, President Donald Trump called for looking into reducing or ending drug rebates. (Photo: Shutterstock)

U.S. Health and Human Services Secretary Alex Azar told lawmakers that it may be time to eliminate the complex system of rebates that drug companies and pharmacy-benefit managers use to negotiate and set prices.

Once drugmakers set a list price for a product, pharmacy-benefit managers like CVS Health Corp. and Express Scripts Holding Co. negotiate rebates. The PBMs have been criticized for keeping some of the rebates for themselves instead of passing them directly to consumers to lower their out-of-pocket costs. Other critics say the spread between a drug’s list price and the PBM-negotiated one can hurt patients who don’t use insurance.

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