Thursday, 14 November, 2019

Trump administration scraps plan to ban drug rebates

Trump abandons plan to ease drug costs for people on Medicare Trump Administration Withdraws Drug Rebate Plan
Gustavo Carr | 13 July, 2019, 09:48

"This proposal has the potential to be the most significant change in how Americans' drugs are priced at the pharmacy counter, ever", Health and Human Services Secretary Alex Azar said in January when the proposal was released.

The Trump administration has withdrawn its proposal to eliminate rebates from government drug plans, the Politico reported on Thursday, citing a White House spokesperson.

The hope was the rule would have effectively pressured drugmakers to give discounts to consumers instead of middlemen, HHS secretary Alex Azar said in remarks to the media in February.

HHS previously said that the rule would counteract incentives behind higher list prices; now, when a list price rises, patients who pay a percentage or all of the list price for a drug see their out-of-pocket expenses increase while PBMs reap financial rewards.

"This is a big setback", said Peter Bach, director of the Center for Health Policy and Outcomes at New York's Memorial Sloan Kettering Cancer Center. "President Trump will consider using any and all tools to ensure that prescription drug costs will continue to decline", he added. "But nevertheless this was a cornerstone of the blueprint".

"Based on careful analysis and thorough consideration, the President has made a decision to withdraw the rebate rule", said Judd Deere, a White House spokesman. One idea would cap drug co-pays for people with Medicare, which would produce savings for seniors taking costly drugs.

The rebate reversal is the second defeat for the administration on drug pricing in a week, coming just days after a court struck down another pillar of its drug pricing plans, a proposed regulation to require that drug companies disclose prices in ads.

Despite reports of conflict between the two top drug pricing advisers, Grogan and Azar appeared jointly on Capitol Hill this week to encourage Republican senators to finalize a bipartisan compromise package to lower prescription drug costs. Needless to say, this has been a very busy week for the White House, and we anticipate continued movement in this space.

Separately, Grassley and Illinois Sen. Legislators, including House Speaker Nancy Pelosi, are pushing for new laws to allow the government to negotiate drug prices directly with manufacturers.

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"Even by their estimates, the Medicare-for-all government takeover of health care would cost $32 trillion over the next 10 years", he said.

The Trump administration will no longer proceed with a large-scale overhaul of the drug-rebate industry. The pharmaceutical industry and many conservative groups have vocally opposed that proposal, known as the worldwide price index, often on the grounds that it would implement "socialist" price controls.

Rebates had become a popular target of criticism in Washington after drug companies lobbied aggressively to cast them as the reason for high prices.

Trump first floated the idea of ending the rebates a year ago as part of a drug pricing "blueprint" aimed at bringing down costs. Drugmakers pay them to pharmacy benefit managers, or directly to insurers, in exchange for a drug being included in a list - or formulary - of drugs covered by a given health plan.

But congressional analysts concluded that drug companies were unlikely to lower list prices across the board in response to the plan.

"At the end of the day, while we support the concept of getting rid of rebates ... we're not going to put seniors at risk of their premiums going up", Azar told reporters Thursday.

Labor Department data indicate that changes may be afoot with drug prices. The White House credits Trump for that change, but independent experts say the trend isn't totally clear yet.

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