Health Secretary Azar Eyes Rebate Reform Save

Reuters reports that the U.S. Health and Human Services Secretary Alex Azar had declared his agency has the authority to eliminate rebates on prescription drug purchases, a key element in the administration’s plan to lower prescription medicine costs.

Azar has said rebates created a perverse incentive to continuously raise drug prices.

HHS has proposed regulations that would scale back protections for rebates.  This has been opposed by pharmaceutic benefit managers who say HHS cannot eliminate rebates on its own and would need Congress to change the federal statute that has allowed this (see blog by Dr. M Feldman http://bit.ly/2OOfgxW ).

Azar contends that the current rebates are a product of previous HHS regulation. “What one has created by regulation, one could address by regulation,” he added.

The current proposal is being reviewed by the Office of Management and Budget, or when this might take effect.

Such changes would likely influence the future use of cheaper biosimilars, of which there are several in rheumatology. 

Last week, rheumatologists representing the ACR met with Azar to discuss changes to Medicare Advantage that could force some patients to try a less effective, cheaper medication for a period of time before their health plan would cover a more expensive therapy.

HHS said Azar emphasized the agency’s interest in lowering drug prices but expressed openness to alleviating burdens that could be placed on physicians as a result of the new rule.

This issue remains a high priority with Azar and the Trump administration.