Trump drops once-touted Medicare drug rebate plan

  • Trump drops once-touted Medicare drug rebate plan

Trump drops once-touted Medicare drug rebate plan

Pharmacy benefit managers (PBMs) negotiate a drug discount on behalf of health insurers and collect a commission for themselves as profit.

The Trump administration is backing down from a controversial effort to lower drug prices, only days after its first major industry reform was overturned by a federal judge.

"Based on careful analysis and thorough consideration, the President has chose to withdraw the rebate rule", spokesman Judd Deere said. On the other hand, the news is a positive development for PBMs.

The proposed rule was also expected to raise Medicare premiums, while only saving money for some beneficiaries who spend a lot on medication.

The rule would have excluded rebates from safe harbor protections that now shelter drug makers' rebates from penalties under the federal Anti-Kickback Statute and would have formed new safe harbor protections for discounts offered directly to patients, as well as fixed-fee service arrangements between drug makers and PBMs. "President Trump and Secretary Azar are taking bold action to end foreign free riding, examine how to safely import lower-cost prescription drugs, empower patients with meaningful transparency, and the list goes on".

And Axios reported the decision to back away from it will now increase pressure on the administration to finalize a proposal that would set Medicare's prices for certain drugs based on the prices other nations pay. On Monday, a federal court ruled the White House could not implement a rule forcing pharmaceutical companies to disclose a drug's list price in television ads.