Removal of Safe Harbor Protection for Rebates Involving Prescription Pharmaceuticals

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April 2019

In this letter, to the U.S. Department of Health and Human Services Office of the Inspector General (OIG), MACPAC comments on a February 6, 2019 rule proposing to eliminate safe harbor protection for drug rebates paid by drug manufacturers to Medicare Part D plans and Medicaid managed care organizations. The proposed rule would establish certain new safe harbors for drug manufacturer discounts provided at the point of sale.

In its letter, the Commission reiterates the observation first expressed at its March 2019 Commission meeting, that the proposed safe harbor changes—which would discount prices at the point of sale and change beneficiary cost sharing for Medicare Part D beneficiaries—are not particularly relevant to Medicaid due to the nominal cost sharing for Medicaid beneficiaries and the statutory rebates that Medicaid receives. The Commission also expresses concern that Medicaid could be affected with respect to supplemental rebates, treatment of chargebacks, elimination of the safe harbor for current rebates negotiated by Medicaid MCOs, and changes in manufacturer prices in response to the proposed rule.

Publication Type: Comment Letters

Tags: carve in/carve out, cost sharing, managed care, Medicare, prescription drugs