National Health Law Program Comments on HHS Safe Harbor Rule for Outpatient Prescription Drugs

Executive Summary

The U.S. Department of Health and Human Services (HHS) proposed new regulations that would remove safe harbor protections for prescription drug rebates. Currently, rebates paid by manufacturers to Medicare Part D plans and Medicaid managed care organizations (MCOs), including pharmacy benefit managers (PBMs) are shielded from federal anti-kickback laws. The proposal would also create a new safe harbor for point-of-sale (POS) rebates to help reduce out-of-pocket costs for consumers.

In comments, the National Health Law Program urges HHS to not change existing regulations with respect to Medicaid. Congress already established limits for cost sharing to nominal amounts to help ensure that Medicaid beneficiaries can access outpatient prescription drugs. The HHS proposal to shift from rebates for MCOs to POS discounts would also likely result in higher MCO drug costs and lead to increased Medicaid spending, while providing no tangible benefit for the 75 million people enrolled in Medicaid.

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