Rebate Rule Is Delayed, Likely to Be Repealed by Congress

The Biden administration will suspend implementation until 2023 of the so-called “rebate rule,” a Trump administration regulation that would have revamped the Medicare prescription drug rebate system. D.C. insiders expect Congress to eliminate the rule before then for budgetary reasons, but say that drug pricing and PBM regulation will be high on the health care agenda after policymakers address the latest issues arising from the COVID-19 pandemic.

The suspension comes in response to a suit against the rule by a PBM trade group, the Pharmaceutical Care Management Association (PCMA), which sought to overturn the rebate rule on the grounds of its rushed implementation. A court order brokered in the U.S. District Court for the District of Columbia stipulates that all provisions of the final rule that were scheduled to take effect on Jan. 1, 2022, are now postponed until Jan.1, 2023, and it directs the parties involved in the lawsuit to issue a joint status report “identifying whether and how this case should proceed by not later than April 1, 2021.”

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