Administration Withdraws Proposed Rebate Rule

Posted by: Daniella Chambers

Seniors nationwide struggle to pay the out-of-pocket costs for their life-saving medications. As prescription drug prices continue to rise, efforts to protect seniors and keep drug costs down have become a priority for members of Congress and the Administration.

In April, the Administration issued a proposed rule to eliminate drug rebates in Medicare, known as the Rebate Rule. This rule intended to change the way in which pharmacy benefit managers (PBMs) negotiate lower drug prices with manufacturers and how plans use the rebated funds.

Currently, rebates are a vital tool used by health plans to lower Part D premiums for beneficiaries. These rebates are negotiated with drug manufacturers by Pharmacy Benefit Managers and used to reduce out-of-pocket costs for all Part D beneficiaries. The Administration wanted to redirect the rebates to be used only for those beneficiaries with high price specialty drugs. It was acknowledged that this would result in increased premiums and out-of-pocket costs, and in some cases, fewer supplemental benefits, for beneficiaries in Medicare Advantage.

Analysis by Department of Health and Human Services, as well as another by the Congressional Budget Office projected that the proposed rule, would increase beneficiary premiums, would cost the federal government hundreds of millions of dollars a year and would likely not reduce prescription drug prices. With this proposed rule set to jeopardize the affordable prescription drug coverage provided in Medicare Advantage, Better Medicare Alliance (BMA) advocates rallied to keep prescription drugs affordable for all beneficiaries who rely on this coverage for essential medications.

Our community of advocates sent 2,962 letters to the Senate Finance Committee urging them to oppose the proposed rule and 1,229 advocates watched the Committee hearing on rebates to learn more about the role of Pharmacy Benefit Managers. Additionally, 2,710 advocates joined the Keep Our Prescription Drugs Affordable Task Force to stay informed on changes that impact MA-PD plans and prescription drug pricing.

Thanks to these efforts, as well as those of BMA ally organizations which also advocated to protect MA-PD plans, the Administration announced on July 11, 2019, that it is withdrawing the proposed rule!

BMA applauded this decision and is pleased to see our advocacy make a difference in protecting low premiums for you and the millions of beneficiaries in MA-PD plans. BMA shares the Administration and Congress’s interest in reducing prescription drug costs for consumers. Working with the Administration and Congress, we will continue to seek solutions to achieve this goal. And, we will support efforts to reduce prices while ensuring that these actions protect the high-quality, affordable prescription drug coverage and health care provided in MA-PD plans.