As the election season heats up, drug prices are coming under even more scrutiny and causing a ripple effect on Medicare Part D.
In late July 2020, President Trump signed an executive order that would revive a proposed rule (which had been withdrawn in 2019) to eliminate the rebates that pharmacy benefit managers (PBMs) on Part D plans receive from manufacturers. The order specifically refers to rebates “that drug manufacturers provide to health plan sponsors, pharmacies, or PBMs in operating the Medicare Part D program.” (At the same time, President Trump issued three other executive orders aimed at controlling drug prices).
In the executive order targeting rebates, President Trump wrote that, “rebates are the functional equivalent of kickbacks, and erode the savings that could otherwise go to the Medicare patients taking those drugs.”
For now, the impact of the order is unclear. But because the order calls on the Secretary of Health and Human Services to take action on the proposed rule after confirming that such a rule would not increase federal spending, Medicare premiums, and out-of-pocket costs for patients, the proposed rule may not actually be finalized, according to the National Law Review.