It’s been a bad week for the Trump administration’s drug pricing plans.
The White House said on Thursday that it is withdrawing a proposal that would end rebates negotiated by pharmacy benefit managers for government health plans. The rule would have forced PBMs to pass rebates to patients instead of keeping the difference as profit.
Some lawmakers and Health and Human Services Secretary Alex Azar have lobbied hard to reform the rebate system. Others said the proposal would be too expensive for taxpayers and could raise premiums for seniors on Medicare. The proposal reportedly created a rift between White House advisers and HHS.
Reforming the rebate system within the drug-supply chain was a key part of the Trump administration’s drug-price blueprint, which was released last year. The blueprint identified restricting the use of rebates and reforming that system as opportunities to lower drug prices.
The proposal’s withdrawal is good news for PBMs, but bad for the pharmaceutical industry, which has tried to pin the blame for high drug costs on “middlemen.”
The White House is spinning the news as best it can, telling Axios, “The Trump administration is encouraged by continuing bipartisan conversations about legislation to reduce outrageous drug costs imposed on the American people.”
An HHS spokesperson told Politico in a statement that the agency is continuing to focus on other ways to bring down drug costs. “President Trump and Secretary Azar are taking bold action to end foreign free riding, examine how to safely import lower-cost prescription drugs, empower patients with meaningful transparency and the list goes on,” the spokesperson said.
This is the second Trump administration drug-pricing proposal to fall this week. On Monday, a federal judge struck down an HHS rule to require drugmakers to disclose a treatment’s list price in TV ads just before it was about to go into effect.