U.S. health secretary challenges PBM rebate structure

Aug 20, 2018

U.S. Health and Human Services Secretary Alex Azar said that rebates negotiated by pharmacy benefits managers create a perverse incentive to continuously raise drug prices.

Drugmakers claim they are pressured to provide rebates to the few PBMs dominating the market but that those payers do not pass on those savings to patients. According to drugmakers, over time, these rebates force them to raise the price of drugs.

In an interview with Reuters, Azar, a former top executive at Eli Lilly, discussed how the Department of Health and Human Services last month proposed regulations that would scale back protections for rebates that might otherwise be illegal under a federal anti-kickback law.

The PBM industry has challenged this move, saying HHS cannot eliminate rebates on its own and would need Congress to change the federal statute.

Read the Reuters coverage

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