The Biotechnology Innovation Organization (BIO) this week lauded an administration proposal that would be a significant step forward in passing along savings from drugmakers’ rebates to beneficiaries enrolled in the Medicare drug benefit program and state Medicaid drug programs. In a letter to the U.S. Department of Health and Human Services, John Murphy, BIO’s Deputy General Counsel, writes:
“We firmly believe that the rebates drugmakers provide insurers and other middlemen should be used to lower what patients pay out-of-pocket for prescriptions. This proposed rule, if finalized, would be a significant step forward in achieving our desire to ensure patients are the beneficiaries of at least some of the $166 billion in rebates, discounts, and other price concessions our member companies, and the biopharmaceutical industry at large, annually pay into the healthcare system in the United States.
“Fundamentally, BIO supports the proposed rule in its effort to streamline reimbursement for medications by focusing more on the patient, rather than the complicated system of middlemen that pervade the U.S. supply chain for prescription medications. …
“In short, changes to the rebate system in favor of transparency and patient cost sharing relief are important.”
When the administration first issued its proposal, BIO’s President and CEO Jim Greenwood noted that “far too often these rebates are not passed along to patients and are instead used to pad the profits of middlemen.” He went on to say that “the current system creates perverse incentives that are driving the affordability crisis many patients face today.” That is why BIO has reaffirmed its support for finalizing the proposed rule, while also urging the administration to take steps to strengthen the proposal, including:
- Making clear that “pharmacy benefits managers” or “PBMs” cannot restrict patients' access to medicines if drugmakers do not want to purchase other services offered by the PBM or its affiliated businesses.
- Implementing regulatory changes that would allow for broader adoption of innovative value-based pricing arrangements, which are “crucial to patient health."
- Clarifying that all changes in the rebate proposal are prospective in nature only and will not be applied retroactively to activities preceding its effective date, which would otherwise have the effect of severely limiting patient access to certain medicines as current agreements are unwound.
- Providing enforcement discretion for stakeholders as they work to address implementation challenges that may arise during the good-faith implementation of a final proposal.
BIO is committed to working with the administration on these and other reasonable changes to ensure the final rule, as Greenwood previously noted, “leads to a fairer system and helps provide more patients affordable access to the medicines they need.”
To read BIO’s full comments on the rebate rule, click here.