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  • Washington Highlights

    HHS Office of Inspector General Releases Proposed Rule to Targeting Drug Rebates

    Mary Mullaney, Director, Hospital Payment Policies

    The Department of Health and Human Services (HHS) Office of Inspector General Jan. 31 released a proposed rule that would pass drug discounts directly on to patients at the point of sale.

    According to the administration, the proposal would “exclud[e] from safe harbor protection under the Federal anti-kickback statue [Section 1128B(b) of the Social Security Act] rebates on prescription drugs paid by manufacturers to pharmacy benefit managers (PBMs), [Medicare] Part D plans, and Medicaid managed care organizations.”

    The proposal summary also notes that this proposed rule is an advancement of the administration’s May 2018 blueprint to lower drug prices, American Patients First, which the AAMC previously commented on in response to a July 2018 request for information from HHS [see Washington Highlights, May 18 and July 20, 2018].

    If finalized, the proposal would require these rebates to be passed on to Medicare and Medicaid beneficiaries at the point of sale. The HHS Office of the Actuary estimates that the rule will result in cumulative savings of $4 billion for state Medicaid programs over 10 years but have net federal Medicaid costs of $1.7 billion between 2020 and 2029.

    The fact sheet on the proposed rule can be accessed here.