Rebates, Rebates, Rebates

Comments on HHS’ proposal to eliminate drug rebates (and you know, basically blow up the entire existing drug supply chain) were officially due at midnight. I haven’t read every comment — some aren’t even publicly available yet — but here are my first few takeaways:

PBM’s Message: Don’t do it! But if you do, keep us around.

It’s no secret that PBMs oppose the administration’s rebate rule, but I was struck by the lengths to which the industry went to demonstrate they could work with the administration to reform the existing rebate system. They clearly don't want to get cut out of the system altogether. 

The industry’s main lobbying group, PCMA, sent in a comment that spans more than 100 pages (!) and proposes scrapping HHS’s idea of creating an entirely new “chargeback” system as a way to eliminate rebates. Instead, the group suggests mandating that negotiated price concessions be passed directly to the patient at the point of sale. As part of its submission, PCMA commissioned its own analysis that found its plan would reduce beneficiary cost sharing by $42.1 billion over ten years.

In separate comments, CVS, too, stressed that “the industry does not need to re-create a model that already exists.” Short of mandating all rebates be shared with patients, CVS suggested HHS require that insurers offer at least one plan with a point-of-sale rebate option.

(By the way, to all the regulatory affairs folks out there: You had months to submit these comments! How is it possible that by the end of the day yesterday, a number of you hadn’t even submitted your comments yet?!)

PhRMA’s Message: It’ll work, and it’ll save money

PCMA wasn’t the only one with a lot to say about the rebate rule. PhRMA’s comments (a whopping 76 pages) include a checklist of no less than 18 “action items” HHS must take up to successfully — at least in PhRMA’s eyes — implement the rule. (Talk about pretending like you run the place.) But overall, HHS has the support of the drug maker trade group.

The biggest thing that immediately caught my eye in PhRMA’s comments was its insistence that the rule will lead to savings for Medicare patients. PhRMA even commissioned its own study from Avalere Health that found a Medicare patient with diabetes that takes five medicines, including insulin, could save more than $950 a year if the rule went into effect.

The generics’ message: Do more!

The Association For Accessible Medicines, which has long decried the so-called rebate trap, told HHS that the proposed rebate rule doesn’t go far enough to end the sort of gaming that has thwarted biosimilar competition. Among AAM’s suggestions: removing rebates in private Medicare Advantage plans and blocking any sort of discounting for branded products when there’s a lower cost generic on the market (unless that generic has already been preferred over a brand.)

One last thing on rebates:

A new poll out today from Consumers for Quality Care, shared first with STAT, found that roughly three quarters of respondents (77% of Republicans, 77% of Democrats and 75% of independents) supported the idea of sharing rebates with consumers, even after being told the change could spike insurance premiums.