Changing Safe Harbor Protections for Prescription Drug Rebates
Changing Safe Harbor Protections for Prescription Drug Rebates
Insight

Prescription drug rebates

Proposed safe harbor changes open for comment

Drug manufacturer rebates to pharmacy benefit managers (PBMs) could be curtailed by HHS’s recently proposed rule ending regulatory safe harbor protections under the Anti-kickback Statute (AKS).  Specifically, the Rebate Rule would curtail rebates that PBMs negotiate on behalf of Part D sponsors and Medicaid Managed Care Organizations.

The new regulatory safe harbors would: (1) protect manufacturer discounts to plan sponsors in cases where those discounts are applied at the pharmacy counter (i.e., applied to point-of-sale (POS) prices); and (2) protect flat-rate fees that manufacturers pay to PBMs for services rendered to health plan clients if the services are fully documented and disclosed.

If the Rebate Rule is finalized as proposed, it would represent a massive change in how PBMs and drug manufacturers do business in Medicare Part D and Medicaid managed care.  Changes would take effect on January 1, 2020.  In the meantime, HHS is allowing a 60-day comment period during which time manufacturers can comment on the feasibility of the timing.

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