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Capitol Correspondence - 07.15.19

HHS Pulls Back Medicaid Drug Rebate Program

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ANCOR is sharing this article by Politico Pulse because of its potential relevance to our members whose agencies might purchase medications for the individuals they support. Medicaid is the main source of funding for programs supporting people with intellectual / developmental disabilities. Readers wanting to learn more about the rebate program might be interested in this older article.

As written by Politico Pulse:

“The HHS secretary had battled for months to get President Donald Trump to sign off on his drug-rebate proposal, arguing that it was the only way to lower U.S. list prices.

But the proposal was killed in a meeting on Wednesday — giving Azar little time to bask in the successful rollout of the administration’s new kidney-care plan, POLITICO’s Sarah Owermohle, Adam Cancryn and Dan Diamond report.

— Working to block Azar’s proposal were acting Chief of Staff Mick Mulvaney, Domestic Policy Council chief Joe Grogan and acting OMB Director Russ Vought, among others.

How they swayed Trump: They pointed to the plan’s estimated $180 billion cost, the potential risk of higher premiums for seniors on the eve of the 2020 elections and other factors like seeming to hand pharma a win by penalizing insurers and PBMs instead.

The fight over the rebate rule was a major source of tensions that have steadily mounted between the White House policy team and the HHS secretary.

— Azar told reporters on Thursday that Trump’s decision to kill his plan was “simple,” given the potential cost to seniors. “He does not want any risk that any action could cause seniors’ premiums to increase,” Azar said, adding “we all agree on that.”

He also pointed to how private insurers are cutting back on use of drug rebates and that Congress may take up legislation to restrict them too. ‘The days of rebates are over,” Azar said, taking a semi-victory lap. ‘We have totally changed the debate on rebates.’

But the Trump drug pricing agenda keeps losing Azar wish-list priorities. A federal judge on Monday blocked another plan touted by Azar, which would require drug list prices to be included in TV ads. HHS has previously scaled back other proposals championed by Azar, like the agency’s retreat on changing coverage of “protected classes” drugs.

Meanwhile, Trump has spurred HHS to pursue work on helping Florida import drugs from abroad, a tactic that Azar initially dismissed as a ‘gimmick’ when reporters asked about it last year.”