January 12, 2021

(Washington, D.C.) — The Pharmaceutical Care Management Association (PCMA) today filed a lawsuit challenging the Trump Administration’s rebate rule.

PCMA’s lawsuit, filed in the district court for the District of Columbia, asks the court to set aside the rebate rule under the Administrative Procedure Act. The PCMA lawsuit also includes a request for a declaration from the court that federal law protects the rebates that Office of Inspector General, U.S. Department of Health and Human Services is seeking to remove from the discount safe harbor regulation.

“The Trump Administration’s last-minute decision to finalize the rebate rule will drastically increase Medicare Part D premiums for seniors, while significantly increasing costs for taxpayers,” said PCMA President and CEO JC Scott. “The haphazard process to finalize a rule that had already been withdrawn circumvented the proper rulemaking process and imposes an effective date that utterly fails to take account of the CMS timeline for issuing implementing guidance, creating chaos for the upcoming plan year. In addition, the agency failed to consider the significant impacts on beneficiaries and government costs that were articulated in thousands of public comments opposing the rule when it was originally proposed. The rebate rule cannot be implemented and should be invalidated.”

To read the court filing, click here.

In addition, Medicare Part D enrollees will be less likely to support elected officials who back proposals resulting in premium increases, according to a new poll from North Star Opinion Research. The poll also indicates that seniors are overwhelmingly satisfied with their drug plans and the drug plan choices offered in the Part D program.

Click here to see widespread stakeholder opposition to the rebate rule including: AARP, AHIP, the Better Medicare Alliance, academics, and high-ranking lawmakers.

Here are the Facts on the Rebate Rule:

  • Part D Premiums Will Increase Dramatically. While about 10 percent of beneficiaries would save under the rebate rule, the other 90 percent would pay more. If premiums increase as much as the 25 percent suggested by the Office of the Actuary (OACT), the average monthly premium in 2020 would have increased from $38.13 to $47.66, with a proportionate increase in 2021 and future years. This would mark the largest average premium increase in the history of the program. Further, because Part D is voluntary, it could destabilize the program if higher premiums cause healthier beneficiaries to drop coverage or never sign up at all.
  • Rebates Lower Medicare Costs. Reports issued by the Government Accountability Office and Health and Human Services Office of Inspector General confirm that PBM-negotiated rebates are passed through and used to lower prescription drug costs in the Medicare program.
  • The Rebate Rule is One of Most Expensive Regulations in History. According to the Congressional Budget Office, the Administration’s rebate rule would cost taxpayers $177 billion over ten years. The Administration’s own actuaries also estimated the cost to be as high as $196 billion over 10 years, and Avalere Health estimated the proposed rule will cost taxpayers $400 billion over that time.
  • Poll: Medicare Part D Beneficiaries are Concerned about Proposed Changes to Drug Plans. Senior registered voters enrolled in Medicare Part D will be less likely to support the reelection of their members of Congress and presidential candidates if those elected officials back proposals eliminating prescription drug negotiations and price concessions that would result in Part D premium increases.
  • The Rule Does Nothing to Address Prescription Drug List Prices. The Administration has continually stated its goal to lower list prices for prescription drugs, and yet the rule only speculated that drug manufacturers might do so. The fact is the manufacturers — and only manufacturers—set drug prices.

Visit the PCMA website for more information.