Health

Insurers, PBMs call on Congress to get rid of delayed Part D rebate rule

A collection of insurer and pharmacy benefit manager groups is not satisfied with just a one-year delay of the implementation of a controversial Medicare Part D rebate rule.

The groups now want Congress to fully nix the rule hastily approved before the end of the Trump administration.

“The rebate rule was and remains unsound policy,” according to a letter sent to congressional leaders Wednesday. “We believe it is imperative to block implementation of this rule to protect Medicare beneficiaries and taxpayers from unsustainable cost increases.”

PBM advocacy group Pharmaceutical Care Management Association (PCMA) signed the letter alongside insurer groups America’s Health Insurance Plans and the Blue Cross Blue Shield Association. Other advocacy organizations such as the Better Medicare Alliance and the Coalition for Affordable Prescription Drugs were among the 16 groups that signed it.

RELATED: PBMs continue war against rebate rule with new campaign

The rule would remove the safe harbor for Part D drug rebates, meaning the rebates would be subject to prosecution under federal anti-kickback laws. In its place, a new safe harbor would be created to apply to discounts offered at the point of sale.

The Department Health and Human Services (HHS) originally proposed the rule in 2018, with former HHS Secretary Alex Azar arguing that rebates amount to a “kickback” drugmakers must pay to get on PBMs’ formularies.

But PBMs and insurers fought the regulation ferociously, pointing to studies by the Congressional Budget Office and other analyses that showed it would lead to higher Part D premiums for seniors.

The Trump White House initially nixed the rule, only to bring it back up again in a final regulation in November 2020.

The elimination of the safe harbor was originally set to take effect on Jan. 1, 2022, but the Biden White House delayed it until Jan. 1, 2023.

HHS said in a court order in January that it was reviewing the rule. The Biden White House has implemented a regulatory freeze to review any rules approved at the last minute by the preceding administration.

But the letter signals that insurers and PBMs won’t be satisfied by having another year to get ready for the rule.

“We urge Congress to take prompt action to entirely eliminate this threat to Medicare beneficiaries and Medicare Part D,” the letter said.

The PCMA has also sued HHS to get rid of the rule, but that case was put on hold after the Biden administration announced the delay.

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