April 4, 2019

(Washington, D.C.) — The Health and Human Services (HHS) Office of Inspector General’s proposed rule on prescription drug rebates in Medicare and Medicaid would increase beneficiary premiums and taxpayer spending, according to a new report — “Concerns Regarding the Proposed Rule to Restrict Drug Manufacturer Rebates in Medicare Part D and Medicaid MCOs” — from Matrix Global Advisors (MGA), authored by Alex Brill, and released today by the Pharmaceutical Care Management Association (PCMA).

As drafted, the Administration’s proposed rule will not achieve the stated goal of reducing federal spending, according to the economic policy consulting firm.

Click here to read the analysis

“This analysis confirms that the proposed policy changes risk significantly raising costs for Medicare beneficiaries and taxpayers, disrupting Part D,” said PCMA President and CEO JC Scott. “PBMs share the Administration’s goals. To better achieve them, we believe that if the proposed rule moves forward, it should be modified so that PBMs continue to be able to negotiate for lower drug prices for consumers and be empowered to help administer any new system.”

In addition, the MGA report supports the assumption by the Centers for Medicare & Medicaid Services Office of the Actuary that restricting rebates will lead to lower price concessions by drug manufacturers, which will increase spending on prescription drugs and create a windfall for drugmakers.

“The Administration has expressed a strong concern about the cost of prescription drugs in the US healthcare system. Oddly, the proposed rule will increase revenues and reduce costs for drugmakers,” said Alex Brill, CEO at Matrix Global Advisors.