Trump Administration Withdraws Drug Rebate Plan

Modesto Morganelli
Luglio 11, 2019

The Trump administration has backed away from a key part of its plan to lower drug prices, Axios is reporting.

According to a report by Politico, the administration has now chose to withdraw the proposed rule, first put forward in February 2019 and championed by HHS Secretary Alex Azar, who has called the use of rebates in the United States "an absolutely silly system".

The Trump administration will no longer proceed with a large-scale overhaul of the drug-rebate industry.

The drug price proposal would have effectively banned drug makers from providing rebates to pharmacy benefit managers and insurers - a radical change in the way many drugs are priced and paid for in Medicare and Medicaid.

Budget projections showed the rule could cost the federal government roughly $177 billion in the next decade, and other policy experts anxious the rule would lead to higher premiums for Medicare beneficiaries. Instead, drug companies would have been encouraged to pass the discounts directly to patients at the pharmacy counter. The rule reportedly faced dissent from domestic policy chief Joe Grogan and others who believed that it would be too costly to implement.

A White House spokesperson said in a statement obtained by Politico the administration will "consider using any and all tools to ensure that prescription drug costs will continue to decline". The pharmaceutical industry and many conservative groups have vocally opposed that proposal, known as the global price index, often on the grounds that it would implement "socialist" price controls.

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