Killing Medicare Part D Rebate Rule a Huge Gift to Pharmacy Benefit Managers (PBMs)

July 12, 2019

Statement from Ted Okon, Executive Director, Community Oncology Alliance (COA):

The Community Oncology Alliance (COA) is extremely disappointed that the Trump Administration is apparently withdrawing a proposed rule to eliminate rebates in Medicare Part D and Medicaid managed care. Killing this rule is a gift handed to the nation’s multi-billion-dollar middlemen corporations, the pharmacy benefit managers (PBMs).

The Trump Administration had a golden opportunity to overhaul the nation’s secretive drug rebate system that has caused enormous pain and confusion among patients with cancer and other serious diseases. The proposed rule would have lowered drug prices for all Americans by finally ensuring that patients receive the benefit of negotiated drug discounts, not plan sponsors and PBMs. 

America’s shameful drug rebate system has served to drive drug list prices higher and higher, benefitting PBM middlemen, and fuel out-of-pocket drug costs for patients. Contrary to popular belief, eliminating rebates would force pharmaceutical manufacturers to lower list prices. By rescinding this rule, corporate PBM middlemen will continue to pocket billions of dollars in record profits from the shadowy network of negotiated rebates, while patients bear the burden of high costs.

In the original plan’s announcement, the President and HHS Secretary said, “nearly every drug company taking a January 2019 price increase announced that all or nearly all of the increase was being paid to PBMs or insurers as rebates.” And yet, the Administration will now allow the status quo to continue. This is totally unacceptable.

Inaction by our elected officials in Washington means that drug prices will remain high and PBM middlemen, who add no real value to patient health, will continue to receive the benefit of the discounts from manufacturers, and reap enormous profits as a result.

Today’s decision also means that cancer patients can expect more misery and abuses to be inflicted on them by PBM middlemen. COA has documented real-life horror stories from practices and physicians about patients battling cancer who have suffered at the hands of PBMs due to delayed coverage decisions, denial of needed treatments, impenetrable bureaucracies, and failure to receive medications in a timely manner.

COA and community oncology practices are actively working to address the high cost of cancer drugs and services. As the frontline providers of care for the majority of Americans battling cancer, independent community oncologists are uniquely positioned to give insight into the impact of federal policymaking on patients, providers, and the overall health care system.