HHS further delays Trump-era drug rebate rule
The Trump-era drug rebate rule won’t fully take effect until at least Jan. 1, 2023, according to a court filing on Friday.
The Biden administration last week delayed the regulation’s effective date until March 22. But HHS didn’t change the Jan. 1, 2022, start date for changes to the policy’s safe harbor protections—the rule’s key provision. Now federal regulators have agreed to put off those changes for another year in response to an ongoing lawsuit by the Pharmaceutical Care Management Association.
“We are encouraged by this important first step in ensuring this bad policy does not go into effect. The delay will provide a much-needed pause to allow the administration ample opportunity to better understand the rebate rule’s harmful impact on millions of Americans,” America’s Health Insurance Plans CEO Matt Eyles said in a statement.
U.S. District Court Judge John Bates for the District of Columbia on Saturday told the federal government it has until April 1 to decide whether it will continue to defend the rule.
The rule would replace the current system, which bases rebates on a drug’s list price, with fixed administrative fees. The Trump administration hoped the regulation would lower drug prices by cutting into the profits of pharmacy benefit managers, companies that process and pay prescription drug claims for employers and health plans. It revived the rule last fall after abandoning it in 2019.
Drugmakers backed the policy change, in part, because it would insulate patients from the sticker prices of some expensive drugs. But insurers and hospitals worried the proposal wouldn’t drive drugmakers to lower prices and could boost their profit margins after it took effect.