In a win for PBMs, Biden administration delays rebate rule

Drug prices
HHS has delayed a Trump-era rule on drug rebates in Part D. (Getty/Tero Vesalainen)

Pharmacy benefit managers have a few extra months to prepare for the Trump administration's rebate rule.

The Department of Health and Human Services has pushed back the start date for the rule, which was set to take effect on Friday, to March 22. The regulation, revived by President Donald Trump's HHS late last year, would replace protections for drug rebates in Medicare Part D with protections for discounts provided directly to consumers. 

In a court order (PDF) filed Saturday, the Biden administration agreed to delay the rule's elimination of safe harbors for drug rebates by one year to Jan. 1, 2023 in response to suit challenging the rule brought by the Pharmaceutical Care Management Association.

In a statement, PCMA said the rule should be "promptly and permanently repealed," as it "was haphazardly finalized and clearly circumvented the proper rulemaking process."

“We applaud the Biden administration for agreeing to delay the January 2022 effective date for the rebate rule," PCMA CEO JC Scott said in a statement. "While we are pleased with the delay and have agreed to pause our litigation for a reasonable period of time to allow the administration to review the rule, if the administration does not, after its review, retract the rule or propose a satisfactory solution to resolve our legal claims, or timely conclude its review, we will be forced to ask the court to reactivate the suit."

PBMs and insurers have blasted the rule as a gift to pharmaceutical companies, and warn that it will lead to higher premiums for Part D beneficiaries. 

RELATED: Trump revives war with payers and PBMs over future of Medicare Part D rebates

Industry groups praised the decision on Friday afternoon. The Campaign for Sustainable Rx Pricing, which includes major payers, providers and PBMs, said in a statement that it hopes the Biden administration will "focus drug pricing efforts instead on market-based solutions to increase transparency, boost competition and hold Big Pharma accountable.”

“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," said CSRxP executive director Lauren Aronson in a statement.

America's Health Insurance Plans CEO Matt Eyles said earlier this week that he is "hopeful" that the Biden administration could pull the rule entirely. The White House has directed agencies to freeze regulations that have yet to go into effect.