By Leslie Small
While a new federal proposal to overhaul the prescription drug
rebate system may not be a significant threat to major managed care companies'
bottom lines, it will likely be disruptive for insurers and PBMs alike.
The proposed rule would remove safe-harbor protections under the
federal anti-kickback statute for rebates paid by drug manufacturers to PBMs,
Part D plans and Medicaid managed care organizations. Instead, it would create
two new safe harbors: one for prescription drug discounts offered directly to
patients, and one for fixed-fee service arrangements between drug manufacturers
and PBMs.
If the proposed rule goes into effect, health insurers will
likely have to raise Part D premiums, as they currently use the rebates they
get from manufacturers to push premiums down, says Chris Sloan, a director at
Avalere. That can be problematic for Part D plans, since one of the main
factors they compete on are low premiums.
PBMs, meanwhile, are facing even more disruption, Sloan says.
"Figuring out how to transition the revenue that they are receiving in the
space now, from a percentage-of-a-rebate-type contract to a fixed-fee agreement
with the health plans that [is] not tied to the cost of the drugs, is going to
be a pretty monumental change."
Still, multiple analysts pointed out that a very small piece of
those companies' earnings is likely to be affected by the new rebate rule if it
goes into effect.
Based in part on company disclosures, "we estimate the big
PBMs'…exposure to all-in rebate retention at [less than] 4% of earnings,"
Citi analyst Ralph Giacobbe wrote.
From Health Plan Weekly
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