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In bold new proposal, Trump administration pitches an end to certain drug rebates

https://www.statnews.com/2019/01/31/in-bold-new-proposal-trump-administration-pitches-an-end-to-certain-drug-rebates/

HHS’ proposal would eliminate a legal provision that allows drug companies and pharmacy benefit managers to negotiate rebates in exchange for making it easier for patients to get access to certain drugs. But the proposal would explicitly allow drug companies and PBMs to negotiate rebates as long as the savings are passed directly to consumers at the pharmacy.

The policy proposal is also a major blow to the pharmacy benefit manager industry, which negotiates rebates off of drug companies’ list prices to lower the cost of the drug to the insurer. Those companies have long opposed efforts to upend how drugs are paid for in the United States, arguing that rebates help them save money for patients.

The Pharmaceutical Care Management Association, which represents PBMs in Washington, has previously said that HHS doesn’t have the authority to change the rebate system without an act of Congress.

“We are concerned … that eliminating the long-standing safe harbor protection for drug manufacturer rebates to PBMs would increase drug costs and force Medicare beneficiaries to pay higher premiums and out-of-pocket expenses, unless there is a viable alternative for PBMs to negotiate on behalf of beneficiaries,” PCMA wrote in a statement Thursday. When asked Thursday whether HHS had the legal authority to eliminate rebates, a PCMA spokesperson directed STAT to the group’s previous statement.