PCMA: Finalizing ‘Rebate Rule’ will increase premiums, taxpayer cost

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WASHINGTON— Pharmaceutical Care Management Association (PCMA) president and CEO JC Scott issued the following statement on the Administration and Health and Human Services (HHS) Secretary Alex Azar finalizing the rebate rule (Removal of Safe Harbor Protection for Rebates to Plans or PBMs Involving Prescription Pharmaceuticals and Creation of New Safe Harbor Protection):

JC Scott

“Simply put, the HHS Secretary’s decision to advance the previously withdrawn rebate rule will drastically increase Medicare Part D beneficiary premiums and taxpayer costs.

Given previous analyses from multiple private sector and government scorekeepers, this rule does not meet the President’s requirement in his Executive Order not to increase costs to beneficiaries or taxpayers. In addition, the rule appears to circumvent the normal rulemaking process that is in place to ensure that these types of significant impacts on beneficiaries and government costs are fully accounted for, raising significant legal questions.


PCMA will explore all possible litigation options to stop the rule from taking effect and destabilizing the Medicare Part D program that millions of beneficiaries rely on.”

Here are the Facts on the Rebate Rule:


  • Part D Premiums Will Increase Dramatically. While about 10 percent of beneficiaries would save under the rebate rule, the other 90 percent would pay more. If premiums increase as much as the 25 percent suggested by the Office of the Actuary (OACT), the average monthly premium in 2020 would have increased from $38.13 to $47.66, with a proportionate increase in 2021 and future years. This would mark the largest average premium increase in the history of the program. Further, because Part D is voluntary, it could destabilize the program if higher premiums cause healthier beneficiaries to drop coverage or never sign up at all.


  • Rebates Lower Medicare Costs. Reports issued by the Government Accountability Office and Health and Human Services Office of Inspector General confirm that PBM-negotiated rebates lower prescription drug costs in the Medicare program
  • The Rebate Rule is One of Most Expensive Regulations in History. According to the Congressional Budget Office the Administration’s rebate rule would cost taxpayers $177 billion. The administration’s own actuaries also estimated the cost to be as high as $196 billion over 10 years, and Avalere Health estimated the proposed rule will cost taxpayers $400 billion over that time.
  • Poll: Medicare Part D Beneficiaries are Concerned about Proposed Changes to Drug Plans.Senior registered voters enrolled in Medicare Part D will be less likely to support the reelection of their members of Congress and presidential candidates if those elected officials back proposals eliminating prescription drug negotiations and price concessions that would result in Part D premium increases.
  • The Rule Does Nothing to Address Prescription Drug List Prices. The Administration has continuously stated its goal to lower list prices for prescription drugs, and yet the rule, as proposed, “intend[ed]” and speculated that manufacturers might do so. The fact is the manufacturers—and only manufacturers—set drug prices.


Visit the PCMA website for more information.



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