CSRxP: BIDEN ADMINISTRATION TAKES IMPORTANT STEP TO PROTECT SENIORS & TAXPAYERS WITH DELAY OF REBATE RULE

HHS Pause of Misguided, Pharma-Backed Policy Will Help Refocus Attention on Holding Big Pharma Accountable in Order to Lower Drug Prices

Washington, D.C. – The Campaign for Sustainable Rx Pricing (CSRxP) issued a statement today reacting to the administration’s decision to delay implementation of a U.S. Department of Health and Human Services (HHS) policy published at the very end of the Trump administration known as the Rebate Rule.

“CSRxP applauds the Biden administration’s decision to delay this misguided pharma-backed proposal to protect America’s seniors and taxpayers,” said CSRxP executive director Lauren Aronson. “We commend the administration for seeing through Big Pharma’s blame game and making the right call to delay this misguided policy which would do nothing to lower drug prices while also increasing premiums on Medicare Part D beneficiaries, costing taxpayers more than $200 billion and handing drug companies a more than $100 billion bailout.”

“We are also pleased to see the Government Accountability Office (GAO) agree the Rebate Rule was issued in violation of a legally required process for public input,” Aronson continued. “CSRxP looks forward to working with the administration and lawmakers to permanently reverse implementation of this disastrous policy and focus drug pricing efforts instead on market-based solutions to increase transparency, boost competition and hold Big Pharma accountable.”

Get The Facts on the Rebate Rule

• Does Nothing To Lower Out-Of-Control Prescription Drug Prices: Government actuaries predict drug manufacturers will keep at least 15 percent of what they would have offered in rebates, in order to offset their increased share of covering the Medicare Part D “donut hole” as outlined in the Bipartisan Budget Act of 2018. Further, actuaries forecast drug prices increasing before finally leveling off, but do not foresee prices decreasing. (Center For Medicare & Medicaid Services Office Of The Actuary, Memo On Proposed Safe Harbor Regulation, 1/31/19)
• Hands Big Pharma A $137 Billion Bailout – Rewarding Drug Companies’ Price Hikes And Anti-Competitive Tactics: Government analysis finds that under the rule, Big Pharma will keep the dollars they currently pay in rebates and use the rule as an opportunity to line their own pockets with an increased $137 billion in overall drug spending – a bailout rewarding their anti-competitive and price-gouging behavior — at a time when the industry is already receiving billions of dollars in support for research and development of COVID-19 treatments and vaccines. (Center For Medicare & Medicaid Services Office Of The Actuary, Memo On Proposed Safe Harbor Regulation, 1/31/19)
• Increases Premiums On American Seniors And Patients With Disabilities By Between 25 and 40 Percent: Analysts at the Congressional Budget Office (CBO), Centers for Medicare and Medicaid Services (CMS) and Avalere Health all agree that under the Rebate Rule, Medicare Part D premiums would increase between 25 and 40 percent. (Center For Medicare & Medicaid Services Office Of The Actuary, Memo On Proposed Safe Harbor Regulation, 1/31/19; Congressional Budget Office, Incorporating The Effects Of The Proposed Rule On Safe Harbors For Pharmaceutical Rebates In CBO’s Budget Projections, 5/2/19; Avalere Health, Costs for Taxpayers Could Skyrocket Under Proposed Rebate Rule, 4/8/19)
• Costs American Taxpayers Between $200 Billion and $400 Billion Dollars: Analysts at the CBO, CMS and Avalere Health all agree the proposed rule would come at a tremendous cost to American taxpayers, with a price tag ranging from nearly $200 billion to more than $400 billion from 2020 to 2029, making it one of the most expensive regulations in U.S. history. (Center For Medicare & Medicaid Services Office Of The Actuary, Memo On Proposed Safe Harbor Regulation, 1/31/19; Congressional Budget Office, Incorporating The Effects Of The Proposed Rule On Safe Harbors For Pharmaceutical Rebates In CBO’s Budget Projections, 5/2/19; Avalere Health, Costs for Taxpayers Could Skyrocket Under Proposed Rebate Rule, 4/8/19)
• Issued in Violation of Legally Required Process for Public Input: Because the Rebate Rule was originally withdrawn last summer, the Government Accountability Office (GAO) found that releasing a final rule without first submitting a new proposal violates requirements for fair public engagement in the rulemaking process under the Administrative Procedures Act (APA). (Jacquie Lee, “Biden Delays Drug Rebate Rule That GAO Says Violates Review Law,” Bloomberg Government, 1/29/21; Bridget C.E. Dooling, Going Through Regulatory Withdrawal, Yale Journal on Regulation, 10/13/20)

Learn more about the misguided Rebate Rule HERE.

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