Without Rebate Dollars, Part D Plans Ponder 2022 Bids

As part of a late-term rulemaking blitz, the Trump administration on Nov. 20 finalized a controversial HHS rule designed to eliminate the use of drug manufacturer rebates in Medicare Part D and ensure that such rebates are passed through to consumers at the point of sale. Although the rule could face legal challenges and/or be reversed by the incoming Biden administration (see box, p. 6), Medicare Advantage Prescription Drug (MA-PD) plan sponsors preparing their 2022 plan year bids must act as though the rule will take effect and may seek ways to maintain $0 premium and supplemental benefit offerings without the availability of rebate funds, industry experts advise.

Effective Jan. 1, 2022, the final rule (85 Fed. Reg. 76666, Nov. 30, 2020) will make significant changes to the Anti-Kickback Statute by removing safe harbor protections for rebates paid by manufacturers to sponsors of Medicare Part D plans. At the same time, it establishes a new safe harbor protecting certain pharmacy point-of-sale price concessions provided to Part D sponsors and Medicaid managed care organizations, such as those based on formulary placement. The rule was first proposed in February 2019 but met with opposition from pharmacy benefit managers and managed care stakeholders, and it was ultimately withdrawn after several entities (including the Congressional Budget Office and the CMS Office of the Actuary) projected it would increase government spending.

© 2021 MMIT

Lauren Flynn Kelly Managing Editor, Radar on Medicare Advantage

Lauren has been covering health business issues, including drug benefits and specialty pharmacy, for more than a decade. She served as editor of Drug Benefit News (the predecessor to Radar on Drug Benefits) from 2004 to 2005 and again from 2011 to 2016, and now manages Radar on Medicare Advantage. Lauren graduated from Vassar College with a B.A. in English.

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