A proposed HHS rule that would restructure the drug rebate system to send discounts straight to consumers has reached the Office of Management and Budget for a final review in just a few months.

“Rebates may be harming federal healthcare programs by increasing list prices, preventing competition to lower drug prices, discouraging the use of lower-cost brand or generic drugs, and skewing formularies,” Vicki Robinson, senior counselor for policy in the HHS Office of Inspector General, said in testimony before the Senate’s Special Committee on Aging.

The proposed rule, released in February, would remove safe harbor protection under the Anti-Kickback Statute for manufacturer rebates to pharmacy benefit managers, Part D plans and Medicaid managed care organizations. The rule also would create a new safe harbor for prescription drug discounts offered directly to consumers and fixed-fee service deals between PBMs and drugmakers.