Earlier this morning, the White House announced that they were scrapping a proposed rule (the rebate rule) that, among other items, would have [would eliminate the current safe harbor protection under the Anti-Kickback Statute for pharmaceutical manufacturer rebates to Medicare Part D plans, Medicaid MCOs and the PBMs with which they contract].  This proposal was a key component of the Administration’s effort to lower drug pricing.  Attention on drug pricing now shifts to other Administration proposals and efforts underway in Congress.

The rebate rule was first proposed the end of January of this year.  See Sarah diFrancesca’s post detailing it here.  Since its release, the proposed rule received over 25,000 comments and was the subject of fierce lobbying by PBMs, pharmaceutical companies and insurers.  Health and Human Services Secretary Alex Azar, a strong proponent of the rebate rule said in April of this year that addressing rebates was central to lowering drug prices.  However, in recent months, the White House became less convinced the proposed rule would force drug companies to lower prices and became wary of the potential cost to taxpayers – estimated to be in the billions of dollars.

Today in a statement, the Administration sided with the opponents of the proposed rule and said “[b]ased on careful analysis and thorough consideration, the President has decided to withdraw the rebate rule.”

With the rebate rule seemingly done and dusted, all eyes turn to other Administration efforts such as limiting price increases paid for drugs covered under Medicare Part B to the inflation rate, drug reimportation, the International Pricing Index and the ongoing legislative negotiations in the House of Representatives and Senate.

Stay tuned.

Posted by Vince Sampson