Azar Testifies on Drug Pricing, Criticizes PBMs and Rebates

HHS Secretary Alex Azar elaborated on the Trump administration’s blueprint to lower drug prices at a June 12 Senate HELP Committee hearing and said it is considering — among other actions — targeting rebates, pharmacy benefit managers and Medicare negotiations.

In response to a question from Sen. Lamar Alexander (R-Tenn.), the committee’s chairman,  about removing or changing rebates in order to clarify where the money goes, Azar said that discussion is “on the table” for the department, at least for rebates in the Medicare Part D program.

Azar said the department believes it has the regulatory authority to modify rebates, which are allowed through an exception to the federal Anti-Kickback statute, noting that moving to a system of fixed priced discounts would have “fairly far-reaching impacts.”

The main question, Azar said, is whether or not HHS can detach the incentives of all entities in the system from artificial list prices.