Proposed HHS Rule Would Remove PBM/Drugmaker Rebates From Safe Harbor

HHS released a proposed rule that would target “backdoor” rebates between drugmakers and pharmacy benefit managers (PBMs), restructuring the rebate system to pass the discounts directly on to consumers.

Under the proposal, manufacturer rebates paid to PBMs, Part D plans and Medicaid managed care organizations would be excluded from safe harbor protection under the Anti-Kickback Statute. Instead, the department would create a new safe harbor for prescription drug discounts offered directly to consumers and fixed-fee service deals between PBMs and drugmakers.

Under the current rebate system, the rebates drugmakers pay to PBMs are not reflected in costs to patients, HHS said in a fact sheet on the proposed rule. The system also discourages the use of generics and biosimilars, as brand-name drug manufacturers can simply make excluding these drugs from formularies a condition of the discounts they offer.