Drug rebate overhaul could come in next 3 months, HHS says

An HHS official said the agency plans to finalize its proposed rule that would overhaul the rebate system in less than three months, according to Politico's Prescription Pulse newsletter.

Seven notes:

1. The proposed rule would ban rebates — the discounts drugmakers pay to pharmacy benefit managers  — in Medicare and Medicaid, unless they are passed directly to the consumer at the pharmacy counter.

2. John O'Brien, HHS senior adviser for drug-pricing reform, said last week that the Trump administration plans to finalize the rebate rule before health plans' deadline to submit 2020 medicare bids. The deadline is in three months.

3. While there's talk about the rule being finalized in less than three months, it would be an "ambitious lift," according to the report. Public comment on the rule remains open for two more weeks.

4. Despite the push to finalize the rule,  "We continue to hear that House Democrats are interested in delaying the HHS rebate rule," Kim Monk of strategic policy research firm Capital Alpha Partners wrote in a note to clients, according to Politico.

5. Democrats are said to fear that the rule could raise premiums and would not do enough to lower list prices.

6. Once the rule is published and finalized, insurers and drugmakers would need to develop new payment policies before the deadline.

7. Despite the unknowns on timing and what the official rule will look like, PBMs aren't waiting around for the rule to be published. Two of the largest PBMs in the nation, CVS Health and Optum Rx, sent letters to drugmakers preparing for a final rule. CVS Health asked them not increase the net costs of their drugs. OptumRx asked them to give at least a seven-quarters notice of price hikes.

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