US Government Propose Rule Overhauling Drug Industry Rebate System

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The U.S. Government on Thursday proposed a rule to end the industrywide system of after-market discounts called rebates that Pharmacy Benefit Managers receive from drugmakers.

President Donald Trump and his administration has been promising to lower the cost of prescription drugs for consumers since day one and this proposal would ban rebates paid by drugmakers to Pharmacy Benefit Managers, or PBM’s, in government programs like Medicare.

Drugmakers pay rebates to insurers and PBM’s in exchange for preferred status with those plans’ customers.

Some of those rebates go toward insurance premiums, and some go to the middlemen to keep for themselves.

Many blame the rebates to PBM’s as the cause of patients having to pay more out of pocket and under the new rule, rebates would be given directly to customers.

In a statement, however, CVS came out blaming drugmakers for high costs, saying: “While PBM’s have become a convenient target in the fight against skyrocketing drug costs, in reality, they serve as a last line of defense for the consumer.”

The main PBM trade group also spoke out saying eliminating rebates would only drive up drug costs and out of pocket expenses for consumers.

The plan isn’t final and will be subject to a 60-day period for public comment.

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