Health Care

White House kills drug rebate proposal, healthcare stocks rally premarket

White House kills drug rebate proposal, healthcare stocks rally premarket”

After two setbacks this week, President Donald Trump is now focusing his drive to curb drug costs on congressional efforts aimed at helping people on Medicare and younger generations covered by workplace plans.

The news led to an immediate uptick in stock prices for PBMs: CVS shares were up 7% in early trading, and Express Scripts (ESRX) shares increased by 10%.

Pharmaceutical company shares fell, with Merck & Co, Bristol-Myers Squibb Co and Pfizer Inc all off more than 3%. "Pharma and biotech seem to have drawn the ire of the administration more recently", said Coldwell, noting the industry's successful legal challenge of a rule that would have required drugmakers to include list prices in TV ads for their medicines.

The Trump administration abandoned a controversial proposal that would have overhauled the rebate system, according to The Hill.

It was a defeat for the pharmaceutical industry, which had lobbied to promote rebates.

"Shelving the rebate reform initiative, which pharma strongly supported, feels like payback", he added. Dick Durbin, the chamber's second-ranking Democrat, are pushing legislation that would grant the government such powers.

At this juncture, the administration is moving forward with its plan to tie Medicare reimbursement for drugs to the lowest prices paid elsewhere.

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The White House first floated the idea of ending the rebates a year ago as part of a drug pricing "blueprint" aimed at bringing down costs.

The rule would have forced companies like Cigna and CVS to either forgo these discounts or pass them onto Medicare patients enrolled in their health insurance plans and drug plans. "Any solution should start with addressing drug prices". Instead, drug companies would have been encouraged to pass the discounts directly to patients at the pharmacy counter.

President Donald Trump speaks about kidney health at the Ronald Reagan Building and International Trade Center, accompanied by Health and Human Services Secretary Alex Azar, left, Wednesday, July 10, 2019, in Washington. Drugmakers prefer that to other approaches lawmakers are considering. The pushback grew after the nonpartisan Congressional Budget Office estimated the plan would have little impact on manufacturer prices and cost Medicare $177 billion over 10 years by leading to higher premiums subsidized by taxpayers. The CBO also said that it was likely that drugmakers would not cut their prices because of the rule. Analysts also questioned how quickly and smoothly the program could have been rolled out.

According to a report by Politico, the administration has now chose to withdraw the proposed rule, first put forward in February 2019 and championed by HHS Secretary Alex Azar, who has called the use of rebates in the United States "an absolutely silly system".

"Based on careful analysis and thorough consideration, the President has chose to withdraw the rebate rule", said Judd Deere, a White House spokesman. While Azar favored the rule, Grogan had reportedly opposed it over cost concerns.

"The Trump administration is encouraged by continuing bipartisan conversations about legislation to reduce outrageous drug costs imposed on the American people, and President Trump will consider using any and all tools to ensure that prescription drug costs will continue to decline".

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