Home Health & Hospice Week

Change would ban drug rebates to PBMs, Part D plans, and Medicaid MCOs.

Pharmacy benefit managers and managed care organizations no longer will benefit from drug manufacturer rebates under federal healthcare programs, if a new rule is finalized as proposed.

In a proposed rule in the Feb. 6 Federal Register, the HHS Office of Inspector General proposes amending the safe harbor regulation. “The amendment would revise the discount safe harbor to explicitly exclude from the definition of a discount eligible for safe harbor protection certain reductions in price or other remuneration from a manufacturer of prescription pharmaceutical products to plan sponsors under Medicare Part D, Medicaid managed care organizations ... (Medicaid MCOs), or pharmacy benefit managers (PBMs) under contract with them,” the rule says.

In other words, “the HHS proposal would expressly exclude from safe harbor protection under the Anti-Kickback Statute rebates on prescription drugs paid by manufacturers to [PBMs], Part D plans and Medicaid managed care organizations,” HHS says in a release.

“Every day, Americans — particularly our seniors — pay more than they need to for their prescription drugs because of a hidden system of kickbacks to middlemen,” HHS Secretary Alex Azar says in the release. “President Trump is proposing to end this era of backdoor deals in the drug industry, bring real transparency to drug markets, and deliver savings directly to patients when they walk into the pharmacy.”

In addition, HHS is proposing two new safe harbors, the OIG notes in the Federal Register rule. “The first would protect certain point-of-sale reductions in price on prescription pharmaceutical products, and the second would protect certain PBM service fees,” the rule notes.

“Under the proposed rule, prescription drug rebates that today amount to, on average, 26 to 30 percent of a drug’s list price may be passed on directly to patients and reflected in what they pay at the pharmacy counter,” according to the release. “By encouraging negotiated discounts that are reflected in cost-sharing methods like co-insurance, used for many expensive drugs in Medicare Part D, the proposal is projected to provide the greatest benefits to seniors with high drug costs.”

The rule is at www.govinfo.gov/content/pkg/FR-2019-02-06/pdf/2019-01026.pdf. A five-page fact sheet on the proposal is at www.hhs.gov/sites/default/files/20190131-fact-sheet.pdf. Comments are due by April 8.