Rebates on the ‘chopping block’

Several groups sent comments to the Trump administration regarding its drug blueprint plan to contain prescription drug costs.  The Biotechnology Innovation Organization has said it supports banning “gag clauses” that block pharmacists from letting patients know about less expensive drugs, but opposes a proposal that would limit which drugs can be covered by Medicare Part D.

Getting rid of rebates for drugs covered under Medicare Part D will increase premiums by more than 50 percent, according to a group representing drug middlemen called pharmacy benefit managers.   The Pharmaceutical Care Management Association released the research this week as the Trump administration is considering eliminating rebates for drugs covered under Medicare Part D, the prescription drug program.

The administration is considering replacing rebates with fixed price discounts so that consumers would get more benefits from the cuts.   Health and Human Services Secretary Alex Azar has criticized rebates negotiated between PBMs, insurers and the drug maker, as PBMs and insurers take too much of a cut from rebates.

The analysis from PCMA said that plan-negotiated manufacturer rebates resulted in $34.9 billion in beneficiary primary savings from 2014 to 2018.  The analysis though did not look into the benefits from a fixed price discount compared to losing a rebate.