Drug Rebate Rule Deadline Pushed Back 60 Days

The delay is part of a larger move by the Biden administration to freeze for 60 days many of the regulatory changes put forward in the last days of the Trump administration that have yet to take effect.

The Department of Health and Human Services has pushed back by two months the implementation date for the controversial Medicare Part D prescription drug Rebate Rule for pharmacy benefits managers.

The delay for the rebate rule, which was supposed to take effect on January 29, is part of a larger order by the Biden administration on January 21 to freeze for 60 days many of the regulatory changes put forward in the last days of the Trump administration that have yet to take effect.

"The effective date of new paragraphs (h)(6) through (9), (cc), and (dd) of that rule, which would have been January 29, 2021, is now March 22, 2021," HHS wrote in the Federal Registry.

"The temporary delay in the effective date of this final rule is necessary to give Department officials the opportunity for further review and consideration of the revisions to paragraphs (h)(5)(vi) and (viii), as well as the addition of new paragraphs (h)(5)(iii), (6) through (9), (cc), and (dd) of 42 CFR 1001.952."

The Rebate Rule eliminates the current system of rebates for prescription drugs under Medicare Part D. HHS under the Trump administration claimed that excluding rebates paid by drug makers to pharmacy benefit managers would resolve a "perverse incentive" and create a "safe harbor" that protects discounts at the point of sale.

PBMs chafed at the Rebate Rule, however, and warned that it would increase premiums for 47 Million Medicare Part D beneficiaries and taxpayers in 2022. Stakeholders had asked a federal judge to delay the implementation date, and they cheered the news of the delay.

"The Trump Administration's hastily finalized rebate rule is a clear and present threat to destabilize the Medicare Part D drug benefit," said Pharmaceutical Care Management Association President and CEO JC Scott, who has called for the rule to be eliminated.

"Not only is the rebate rule itself misguided, but the aggressive timeline is virtually impossible to meet," Scott said.

The Campaign for Sustainable Rx Pricing praised the Biden administration's "decision to delay this misguided pharma-backed proposal to protect America’s seniors and taxpayers."

CSRxP executive director Lauren Aronson said the Rebate Rule "would do nothing to lower drug prices while also increasing premiums on Medicare Part D beneficiaries, costing taxpayers more than $200 billion and handing drug companies a more than $100 billion bailout."