By Leslie Small and Judy Packer-Tursman
In a move that Wall
Street analysts deemed a win for the managed care industry, the Trump
administration decided to withdraw a proposed rule that would have overhauled
the prescription drug rebate system in Medicare Part D.
The proposed rule, first
released in February, would have removed 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, and it would have created
a new safe-harbor protection for point-of-sale drug discounts.
Citi analyst Ralph
Giacobbe told investors his firm expects the news "to be favorable most
specifically to entities with larger PBM exposure (Cigna Corp., CVS Health
Corp./Aetna and UnitedHealth Group) as it eliminates the uncertainty and
overhang that the rebate rule had on those companies."
Meanwhile, industry
experts expressed surprise at the administration’s pullback on the rebate
proposal and its timing.
"My initial reaction
is it's surprising given the amount of capital the administration has put into
this policy," says Matt Kazan, a principal in Avalere Health's policy
practice. He adds dropping the rebate rule increases the likelihood that the
Trump administration will move forward on other proposals to show progress in
its vow to lower drug costs.
Kazan points to various
implications for health plans in the rebate rule's demise. "Certainly, a
lot of the uncertainty about 2020 and 2021 goes away in terms of bidding and
Part D," he says. But if Congress makes structural changes to Part D that
it's considering, he says there could be greater liability for plans in the
catastrophic phase of the benefit.
From Health Plan Weekly
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