HHS Proposes New Rule to Eliminate Rebates and Encourage Direct Discounts

The Department of Health and Human Services (HHS) has proposed a new rule aimed at eliminating certain drug rebates and encourage direct discounts for federal beneficiaries.  The proposed rule would

  • Eliminate Anti-Kickback Statute safe harbor protection for rebates paid by drug manufacturers to pharmacy benefit managers (PBMs), Medicare Part D plans and Medicaid managed care plans,
  • Create a new safe harbor for drug discounts offered at the point of sale, and
  • Create a new safe harbor for PBM fees charged to drug manufacturers

HHS Secretary Alex Azar, stated that “[t]his proposal has the potential to be the most significant change in how Americans’ drugs are priced at the pharmacy counter, ever, and finally ease the burden of the sticker shock that millions of Americans experience every month for the drugs they need.”

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