Brady Says Drug Rebates Should Be Shared With Seniors, But It’s Not Clear How

DATE: September 7, 2018

Published by Inside Health Policy

House Ways & Means Chair Kevin Brady (R-TX) relayed to HHS Secretary Alex Azar Thursday (Sept. 6) his reservations with making health plans share drug rebates at the point of sale. Brady’s staff has criticized proposalsthat dictate how plans use rebates, and when asked about point-of-sale rebates Thursday, he only said Congress and the administration are still working out how rebates should benefit seniors.

Brady said he and Azar spoke about rebates, including whether the government should force plans to share them at the point of sale or whether they should be abolished.

“We had discussions about each of those elements, including the rebates,” he told IHP’s Inside Drug Pricing in response to whether he prefers to abolish rebates or make plans share them at the point of sale. “I think there’s general consensus that the rebate system needs to deliver lower costs for each patient seeking that prescription. The question is how best to do it.”

Brady’s office did not respond to follow-up questions about whether he opposes point-of-sale reports or their abolishment.

When Inside Health Policy reported in April that Ways & Means health subcommittee Chair Peter Roskam (R-IL) was warming to point-of-sale rebates, Brady’s Communications Director Julia Slingsby demanded a correction and said Roskam opposes them (A transcript of the exchange between Roskam and IHP is available here).

Medicare law prohibits the government from interfering in drug price negotiations between drug makers and the private plans that administer the Medicare drug benefit. Some House Republicans worry that dictating how plans share rebates is a violation of that non-interference clause, but CMS officials say forcing point-of-sale rebates is legal.

Point-of-sale rebates are a big part of HHS Secretary Azar’s plan to lower drug prices. Plans may use rebates however they like, but they mostly use them to lower premiums instead of lowering what customers pay at the pharmacy counter. Azar complains often that cost-sharing is based on list prices, and President Donald Trump proposed considering Medicare Part D rebates paid to pharmacy benefit managers as illegal kickbacks.

The White House Office of Management and Budget is reviewing a proposed rule by the HHS Inspector General on anti-kickback safe harbors for drug rebates. It’s not clear what the administration is considering because the title of that proposal states it would both remove safe harbor protections and create new ones for drug rebates. Brand drug companies want rebates shared with consumers at the point of sale because cost sharing is based on list prices, but drug makers don’t want to do away with rebates. Others say sharing rebates at the point of sale would merely shield seniors from drug prices and do nothing to curb rising drug prices. — John Wilkerson (jwilkerson@iwpnews.com)