August 3, 2020

(Washington, D.C.) — The Pharmaceutical Care Management Association (PCMA) is announcing the launch of the next series of ads as part of the TV and digital advertising campaign on the Administration’s plans to revive the so-called rebate rule.

View the new TV ad.

“President Trump made the right decision last year to protect America’s seniors by withdrawing the proposed rebate rule. The Department of Health and Human Services’ (HHS) plans to revive this rejected policy idea makes no sense as a finalized rule will force America’s seniors to pay more for their Medicare Part D coverage,” said PCMA President and CEO JC Scott. “Right now, in an economy decimated by a global pandemic, any proposal that increases Medicare premiums is the wrong approach to helping our seniors afford their prescription drugs.

When reviewing the President’s instruction – as reflected in his recent Executive Order – not to raise Medicare beneficiaries’ premiums or cost sharing, and not add to federal spending, the HHS Secretary should accept the cost estimates from the Centers for Medicare & Medicaid Services Office of the Actuary. Basing cost estimates on unfounded assumptions that drug manufacturers are voluntarily going to lower their prices, as HHS did last year in citing several outside analyses of the rule, is inappropriate for this magnitude of policy, and not fair to America’s seniors.

PBMs support policies that will increase competition and reduce prescription drug costs for everyone, and we look forward to working with the Administration and Congress to advance solutions that reduce drug costs and protect America’s seniors.”

The PCMA campaign warns policymakers and the public that the rebate rule will drastically increase Medicare premiums for America’s seniors. In addition, the campaign highlights the President’s commitment to Medicare beneficiaries by highlighting Health and Human Services Secretary (HHS) Alex Azar’s 2019 comments following the Administration’s decision to withdraw the rule: “The president is deeply committed to protecting America’s seniors. He does not want any risk that any action could cause seniors’ premiums to increase,” said HHS Secretary Azar, according to a Politico article.

Here are the Facts on the Proposed Rebate Rule:

  • Part D Premiums Will Increase Dramatically: Ninety percent of beneficiaries would pay higher premiums, while only about 10 percent of beneficiaries would save more on cost-sharing than they spend on premiums. If premiums increased each year and by 25% over 10 years, as estimated by the CMS Office of the Actuary, 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.
  • The Proposed Rebate Rule is One of Most Expensive Regulations in History: According to the Congressional Budget Office, the Administration’s rebate reform proposal 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 backed proposals eliminating prescription drug negotiations and price concessions that would result in Part D premium increases, according to a poll from North Star Opinion Research.
  • The Proposed 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 proposed rule “intends” and speculates that manufacturers might do so. The fact is the manufacturers—and only manufacturers—set drug prices.  Furthermore, independent research shows that for every $100 spent in the prescription drug supply chain on branded drugs, pharmacy benefit managers (PBMs) retain about two dollars, compared with $58 for drugmakers.

Recent reports by the Government Accountability Office (GAO) and HHS Office of the Inspector General (OIG) found that PBM-negotiated rebates lower prescription drug costs:

  • The GAO report found that virtually all – 99.6% – prescription drug rebates negotiated by PBMs with drug manufacturers, in Medicare Part D, are passed through to plan sponsors and used to lower costs for Medicare beneficiaries.
  • An HHS OIG report also confirms that PBM-negotiated rebates lead to lower prescription drug costs, specifically in the Medicare prescription drug program.

Visit PCMA’s website to learn more.

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PCMA is the national association representing America’s pharmacy benefit managers (PBMs). PBMs administer prescription drug plans for more than 270 million Americans who have health insurance from a variety of sponsors including: commercial health plans, self-insured employer plans, union plans, Medicare Part D plans, the Federal Employees Health Benefits Program (FEHBP), state government employee plans, Medicaid plans, and others.