White House Scraps Medicare Drug Rebate Rule

The Trump Administration has withdrawn a proposed rule targeting “backdoor” rebates between drugmakers and pharmacy benefit managers (PBMs).

The proposed rule would have removed safe harbor protection under the Anti-Kickback Statute for manufacturer rebates to PBMs, Medicare Part D plans and Medicaid managed care organizations. Instead, a new safe harbor would have covered prescription drug discounts offered directly to consumers and fixed-fee service deals between PBMs and drugmakers.

The withdrawal of the rule follows a Congressional Budget Office report released in May which estimated the measure would increase federal spending by nearly $170 million between 2020-2029.