Rebate Rule Rises From Dead, but Could Still Be Doomed

On Nov. 20, HHS finalized a once-tabled regulation that would revamp the Medicare prescription drug rebate system. While that may seem to be unwelcome news to the health insurers and PBMs that have vocally opposed the so-called rebate rule, it is not at all certain that this version will survive amid likely legal challenges and the upcoming transfer of power in the White House.

HHS first introduced the rebate rule 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 (RDB 2/14/19, p. 1). The goal, HHS Secretary Alex Azar said at the time, was to prevent situations in which patients “pay more than they need to for their prescription drugs because of a hidden system of kickbacks to middlemen.”

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Leslie Small

Leslie Small

Leslie has been working in journalism since 2009 and reporting on the health care industry since 2014. She has covered the many ups and downs of the Affordable Care Act exchanges, the failed health insurer mega-mergers, and hundreds of other storylines spanning subjects such as Medicaid managed care, Medicare Advantage, employer-sponsored insurance, and prescription drug coverage. As the managing editor of Health Plan Weekly and Radar on Drug Benefits, she writes and edits for both publications while overseeing a small team of reporters who also focus on the managed care sector. Before joining AIS Health, she was a senior editor for the e-newsletter Fierce Health Payer, and she started her career as a copy editor at multiple local newspapers. She graduated with a dual degree in journalism and political science from Penn State University.

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