The rebate rule is here

QUICK FIX

— The long-awaited HHS rebate rule has arrived, after six months of kicking around the White House budget office — and it's poised to shake up pharmaceutical spending.

— President Donald Trump wants to make abortion a focus of his State of the Union, leaning into controversies in New York and Virginia, POLITICO reports.

— The White House drug office released its first national strategy under Trump, nearly a year behind schedule.

A message from PhRMA: Due to robust market negotiations, retail medicine costs grew just 0.4% in 2017—the slowest rate in 5 years. And a new government study found medicine prices fell 2.8% last year. Learn more at

Driving the Day

THE REBATE RULE IS HERE — Under the administration's proposal, Medicare and Medicaid plan sponsors won’t be able to hold onto rebates from pharmaceutical manufacturers anymore. HHS instead would make a new kickback exemption for prescription drug discounts offered directly to patients. More from POLITICO's Sarah Karlin-Smith and Sarah Owermohle.

— The likely impact: Seniors’ Medicare premiums are likely to go up, anywhere from eight to 22 percent. But HHS says those hikes will be offset by lower out-of-pocket spending on high-cost drugs.

It also means savings for the pharmaceutical industry, because fewer patients will be pushed into the coverage gap, or so-called donut hole, where manufacturers have to pick up most of the tab for their products.

— It's a big deal: HHS has been mulling the plan for months, and it had reportedly caused division within the administration. But Secretary Alex Azar touted the proposal for its "potential to be the most significant change in how Americans’ drugs are priced at the pharmacy counter."

“They really swung for the fences on this," Avalere's Chris Sloan told PULSE, saying that the proposal represents a fundamental shift in payment for health plans, PBMs and even for pharmacies.

— What HHS can't do on its own: The administration says it will need Congress to implement similar rules for private insurers. An early vote of confidence came from Sen. Chuck Grassley, head of the Senate Finance Committee, who praised HHS for taking "tough steps."

https://www.politico.com/newsletters/politico-pulse/2019/02/01/the-rebate-rule-is-here-498294

Very long article, just posted a small bit