what are rebates in pharmaceutical industry

In the pharmaceutical industry, rebates are post-sale payments that drug manufacturers provide to pharmacy benefit managers (PBMs) or health plans in exchange for favorable formulary placement or volume. They are a key driver of the 'gross-to-net' gap between a drug’s list price and its realized revenue, influencing both pricing strategy and patient cost exposure. For PBM-side rebate flow details, see RxPBM.