January 30, 2021

(Washington, D.C.) — In response to litigation brought by the Pharmaceutical Care Management Association (PCMA) challenging the Medicare Part D rebate rule, the Biden Administration agreed to postpone the effective date of the provisions of the rule relating to the elimination of the regulatory discount safe harbor for retrospective rebates, from January 1, 2022, to January 1, 2023.  Judge John D. Bates of the U.S. District Court for the District of Columbia entered an order memorializing the agreement on January 30, 2021

The delay in the effective date will give the Biden Administration the necessary time to review the entire rebate rule’s impact on Medicare Part D and its enrollees. Following the court’s order postponing the effective date and holding the case in abeyance, PCMA moved to dismiss its motion for partial summary judgment on the lawfulness of the 2022 effective date, as well as its motion for expedited review of that partial summary judgment motion, and will temporarily hold off on litigating the remainder of its claims.

“We applaud the Biden Administration for agreeing to delay the January 2022 effective date for the rebate rule. While we are pleased with the delay and have agreed to pause our litigation for a reasonable period of time to allow the Administration to review the rule, if the Administration does not, after its review, retract the rule or propose a satisfactory solution to resolve our legal claims, or timely conclude its review, we will be forced to ask the court to reactivate the suit,” said PCMA President and CEO JC Scott. “The rebate rule was haphazardly finalized and clearly circumvented the proper rulemaking process. Evidence showing that the rebate rule will significantly increase beneficiary premiums and government costs was ignored by the previous Administration. The rebate rule should be promptly and permanently repealed.”

In addition, PCMA commends the Biden Administration for taking action on the rebate rule by delaying the two new safe harbors in Medicare Part D so it can further consider the overall rule.

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PCMA is the national association representing America’s pharmacy benefit managers (PBMs).  PBMs administer prescription drug plans for more than 266 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.