HHS Raises Eyebrows With Promises That New Rebate Rule Won’t Hike Premiums, Spending

On Nov. 20, as part of a health care regulatory blitz taking place in the waning days of the Trump administration, HHS finalized a once-tabled regulation that would revamp the Medicare prescription drug rebate system. This time around, HHS is promising that the so-called rebate rule won’t raise costs for Medicare beneficiaries or the federal government, but some experts remain skeptical.

The rebate rule first appeared in January 2019 in a notice of proposed rulemaking (NPRM), which aimed to remove safe-harbor protections under the federal anti-kickback statute for rebates that drug manufacturers provide to Medicare Part D plans, PBMs and Medicaid managed care organizations. But the administration pulled the proposed rule in July 2019 amid estimates from the Congressional Budget Office (CBO) and CMS’s Office of the Actuary that it would increase federal spending and Medicare beneficiary premiums.

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