DOSE OF REALITY: TRUMP ADMINISTRATION MUST DUMP REBATE RULE TO ACHIEVE SECOND TERM GOAL OF LOWERING PREMIUMS

Misguided Measure Would Increase Medicare Part D Premiums, Cost Taxpayers More Than $200 Billion and Do Nothing To Lower Prescription Drug Prices

On Monday, the Trump Administration released a list of second term health care priorities, which included “lowering healthcare insurance premiums.” If the administration is going to be successful in accomplishing that goal, it must dump the misguided Rebate Rule, which would increase premiums on Medicare Part D beneficiaries, cost taxpayers more than $200 billion, hand Big Pharma a more than hundred-billion-dollar bailout and do nothing to lower prescription drug prices.

According to the administration’s own actuaries at the Center for Medicare and Medicaid Services (CMS), the nonpartisan Congressional Budget Office (CBO) and industry analysts, if implemented the Rebate Rule would hike premiums for beneficiaries who rely on Medicare for their prescription drug coverage:

• A 25 Percent Hike In Premiums For Medicare Part D Recipients. According to CMS actuaries, the proposed rule will increase Medicare Part D premiums for seniors and individuals with disabilities by 25 percent overall and 19 percent in 2020 alone. (Center For Medicare & Medicaid Services Office Of The Actuary, Memo On Proposed Safe Harbor Regulation, 1/31/19)
• Increase Premiums for Part D Beneficiaries. The CBO found that if “rebates were no longer paid directly to plans, Part D premiums would rise.” (Congressional Budget Office, Incorporating The Effects Of The Proposed Rule On Safe Harbors For Pharmaceutical Rebates In CBO’s Budget Projections, 5/2/19)
• Increase Premiums On American Seniors And Patients With Disabilities Up To 40 Percent: Analysts at Avalere Health found that under the Rebate Rule, Medicare Part D premiums could increase by as much as 40 percent. (Avalere Health, Costs for Taxpayers Could Skyrocket Under Proposed Rebate Rule, 4/8/19)

Learn more about the Rebate Rule HERE.

The administration also included “cut[ting] prescription drug prices” as an additional second term health care priority. CSRxP commends the administration for its commitment to lowering drug prices and encourages the president to focus on market-based solutions to hold Big Pharma accountable and crack down on the industry’s price-gouging behavior and anti-competitive tactics to achieve that objective.

Big Pharma continues to hike prices on prescription drugs in the midst of a pandemic, while millions of Americans continue to grapple with the economic impact of COVID-19. Engaging in price hikes during a pandemic, while receiving billions of dollars from taxpayers to help develop COVID-19 treatments, demonstrates why policymakers must act to hold Big Pharma accountable.

Learn more about solutions to hold Big Pharma accountable and lower prescription drug prices HERE.