Health Care Weekly Preview from ML Strategies – February 2019

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The long-awaiting safe harbor proposed rule was published last week as the Administration looks to get out in front of the drug pricing debate that is sure to shape the 116th Congress. Under the proposed rule,rebates offered by manufacturers to Part D plans, Medicaid managed care organizations (MCO), and pharmacy benefit managers (PBM) would not receive safe harbor protection under the Anti-Kickback Statute. Additionally, it would create a new safe harbor for prescription drug discounts offered directly to patients, as well as fixed fee service arrangements between drug manufacturers and PBMs.

The real life effect of the proposal on lowering out-of-pocket costs for prescription drugs remains unclear. HHS ran a number of projections that found anywhere from an 8 to 22 percent increase in premiums for patients not in low-income subsidized plans. The proposal was largely met with skepticism from key Democrats who would like to see the government take more direct action on manufactures lower prices.

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