REBATE RULE A BIG PHARMA BAILOUT PAID FOR ON THE BACKS OF AMERICAN SENIORS AND TAXPAYERS
Administration Should Abandon Previously Rejected Measure That Rewards Drug Companies’ Pandemic Price Hikes and 340B Changes That Would Undermine Critical Program for Many of America’s Most Vulnerable
For Immediate Release
Contact: Jon Conradi
Washington, D.C. – The Campaign for Sustainable Rx Pricing (CSRxP) issued a statement Friday after the President signed an executive memorandum instructing the U.S. Department of Health and Human Services (HHS) to implement several policies relating to prescription drug prices.
“After years of talking about holding Big Pharma accountable, the administration demonstrated a shocking deference to the will of the pharmaceutical industry today,” said CSRxP executive director Lauren Aronson. “The White House suggests it will only advance a most favored nation rule after allowing Big Pharma executives to propose an alternative, while moving forward with the Pharma-backed Rebate Rule and changes that would weaken the 340B program.”
“The reboot of the Rebate Rule would hand Big Pharma a massive bailout paid for on the backs of Americans seniors and taxpayers,” Aronson continued. “The administration made the right call last year to halt this policy that would increase premiums on Medicare Part D beneficiaries, cost taxpayers more than $200 billion, hand Big Pharma a more than hundred-billion-dollar bailout and do nothing to lower prescription drug prices.”
“Handing Big Pharma a massive bailout by advancing the Rebate Rule would reward the industry for its egregious price-hiking practices that have continued at pace during the pandemic,” Aronson said. “While millions of Americans have grappled with the economic impact of the pandemic, Big Pharma has continued to hike prices, increasing prices on more than 42 drugs in just the first week of July alone.”
“In addition, proposed changes to the 340B program, which provides meaningful relief for safety-net providers that serve many of the nation’s most vulnerable patients, could undermine this critical initiative,” Aronson noted. “The administration should stand up to the influence of Big Pharma by withdrawing the Rebate Rule, leaving the 340B program alone and advancing solutions to hold drug companies accountable.”
If implemented, the Rebate Rule would:
- Increase Premiums On American Seniors And Patients With Disabilities By Between 25 and 40 Percent: Analysts at the Congressional Budget Office (CBO), Centers for Medicare and Medicaid Services (CMS) and Avalere Health all agree that under the Rebate Rule, Medicare Part D premiums would increase between 25 and 40 percent. (Center For Medicare & Medicaid Services Office Of The Actuary, Memo On Proposed Safe Harbor Regulation, 1/31/19; Congressional Budget Office, Incorporating The Effects Of The Proposed Rule On Safe Harbors For Pharmaceutical Rebates In CBO’s Budget Projections, 5/2/19; Avalere Health, Costs for Taxpayers Could Skyrocket Under Proposed Rebate Rule, 4/8/19)
- Cost American Taxpayers Between $200 Billion and $400 Billion Dollars: Analysts at the CBO, CMS and Avalere Health all agree the proposed rule would come at a tremendous cost to American taxpayers, with a price tag ranging from nearly $200 billion to more than $400 billion from 2020 to 2029, making it one of the most expensive regulations in U.S. history. (Center For Medicare & Medicaid Services Office Of The Actuary, Memo On Proposed Safe Harbor Regulation, 1/31/19; Congressional Budget Office, Incorporating The Effects Of The Proposed Rule On Safe Harbors For Pharmaceutical Rebates In CBO’s Budget Projections, 5/2/19; Avalere Health, Costs for Taxpayers Could Skyrocket Under Proposed Rebate Rule, 4/8/19)
- Hand Big Pharma A $137 Billion Bailout – Rewarding Drug Companies’ Price Hikes And Anti-Competitive Tactics: Government analysis finds that under the rule, Big Pharma will keep the dollars they currently pay in rebates and use the rule as an opportunity to line their own pockets with an increased $137 billion in overall drug spending – a bailout rewarding their anti-competitive and price-gouging behavior — at a time when the industry is already receiving billions of dollars in support for research and development of COVID-19 treatments and vaccines. (Center For Medicare & Medicaid Services Office Of The Actuary, Memo On Proposed Safe Harbor Regulation, 1/31/19)
- Do Nothing To Lower Out-Of-Control Prescription Drug Prices: Government actuaries predict drug manufacturers will keep at least 15 percent of what they would have offered in rebates, in order to offset their increased share of covering the Medicare Part D “donut hole” as outlined in the Bipartisan Budget Act of 2018. Further, actuaries forecast drug prices increasing before finally leveling off, but do not foresee prices decreasing. (Center For Medicare & Medicaid Services Office Of The Actuary, Memo On Proposed Safe Harbor Regulation, 1/31/19)
- Increase Out-Of-Pocket Costs For Medicare Part D Beneficiaries: While there is widespread agreement the Rebate Rule would increase premiums, there is also the potential it would actually also increase out-of-pocket costs. In fact, analysts at Avalere Health found the Rebate Rule could increase out-of-pocket costs for Medicare Part D beneficiaries by as much as $36.5 billion. (Avalere Health, Costs for Taxpayers Could Skyrocket Under Proposed Rebate Rule, 4/8/19)
Learn more about Big Pharma’s pandemic price hikes and the Big Pharma bailout, aka Rebate Rule HERE.
Learn more about market-based solutions to hold Big Pharma accountable and lower prescription drug prices HERE.