Court Freezes Trump’s Rule Banning Pharma Rebates to PBMs

The Biden administration and Pharmaceutical Care Management Association (PCMA), the trade association for pharmaceutical benefit managers (PBMs), have agreed to postpone, from January 1, 2022, to January 1, 2023, the effective date of the Trump administration rule eliminating safe harbor protection for manufacturer rebates to PBMs under Medicare Part D.

PCMA sued the U.S. Health and Human Services Department (HHS) on Jan. 26 to vacate the rebate rule’s effective date, saying the Trump administration issued the rule in violation of the Administrative Procedure Act. The Biden administration and PCMA agreed to the year-long postponement to give a federal district judge “the necessary time to review the entire rebate rule’s impact on Medicare Part D and its enrollees,” PCMA said.

The judge issued an order on Jan. 30 granting the parties’ motion for the postponement.

A recent U.S. Senate Finance Committee report found that manufacturer rebates for insulins have increased exponentially since 2013, putting pressure on manufacturers’ margins and causing them seek ways to make up for lost revenue elsewhere. The three insulin manufacturers serving the U.S. market—Lilly, Sanofi, and Novo Nordisk—are leading the drug industry fight against 340B contract pharmacy.