WashU Expert: New Trump drug policy proposal ambitious, but is it feasible?

pills and bottles on a table

The Trump Administration Jan. 31 released a proposed rule that could alter the way many drugs are priced and paid for among Medicare and Medicaid plans.

The proposed regulation would eliminate the regulatory safe harbor for rebates as they exist today, said an expert on drug policy and pricing at Washington University in St. Louis.

Rachel Sachs
Sachs

“The new proposal aims to eliminate rebates from pharmaceutical companies to pharmacy benefit managers (PBMs) in Medicare Part D and in Medicaid managed care organizations,” said Rachel Sachs, associate professor of law in the School of Law.

“The proposed rule would eliminate the regulatory safe harbor for rebates as they exist today, replacing it with two, far narrower safe harbors designed to directly benefit patients with high out-of-pocket costs and to change the way PBMs are compensated,” Sachs said.

If finalized in its current form, this proposed rule would almost certainly be the largest change to the prescription drug pricing system the administration has put forward so far, she said.

“However, many questions remain about what the effects of the proposed rule would be, and whether the administration’s ambitious implementation timeline is feasible,” Sachs said.

She discusses the full details of the proposal and its implications for drug pricing in her blog post at Health Affairs.

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