Administration Should Abandon Misguided Policy That Rewards Drug Companies’ Price-Gouging and Anti-Competitive Tactics With Massive Bailout
On Monday, the Trump Administration took a step toward enacting a misguided policy aimed at eliminating prescription drug rebates in Medicare Part D called the Rebate Rule by sending the measure to the Office of Management and Budget (OMB) for final review. The administration made the right decision in scrapping this proposal in 2019 and should not force-through the Rebate Rule now. The Wall Street Journal rightly noted that in reviving the Rebate Rule, the administration said it would be revised to not increase premiums or federal spending — an impossible threshold that no amount of budget gimmickry could meet given the scale of the negative repercussions of this plan.
The fact is, the rule would do nothing to lower out-of-control prescription drug prices:
And even increasing out-of-pocket costs for Medicare Part D beneficiaries:
The Rebate Rule would also put taxpayers on the hook for at least $200 billion in increased spending:
The rule’s principal winner would be Big Pharma, who would be handed a massive bailout, effectively rewarding the industry for its egregious price-gouging and anti-competitive practices, including hiking prices on American patients during a pandemic. In addition, the Rule would eliminate a key negotiating step that serves as the only real check on the pharmaceutical industry’s unilateral control over prices:
Big Pharma must be held accountable for the industry’s price-gouging and anti-competitive tactics, including hiking prescription drug prices at the height of the pandemic — not handed a massive bailout paid for on the backs of seniors and taxpayers. The administration should withdraw the misguided Rebate Rule, now.
Learn more about the misguided Rebate Rule HERE.
Learn more about market-based solutions to hold Big Pharma accountable and lower prescription drug prices HERE.