# US Federal HHS goes after medicine rebates to middlemen
**URL:** https://forum.fudiabetes.org/t/us-federal-hhs-goes-after-medicine-rebates-to-middlemen/6376
**Category:** Insulin
**Created:** [February 1, 2019, 10:22am UTC](https://forum.fudiabetes.org/t/us-federal-hhs-goes-after-medicine-rebates-to-middlemen/6376 "2019-02-01T10:22:40Z")
**Posts on this page:** 17
**Page:** 1
### Author:  [@Michel](https://forum.fudiabetes.org/u/Michel)
#### Post date: [February 1, 2019, 10:22am UTC](https://forum.fudiabetes.org/t/us-federal-hhs-goes-after-medicine-rebates-to-middlemen/6376/1 "2019-02-01T10:22:40Z")
We have often discussed the nefarious impact of rebates to middlemen, which is possibly the primary cause of inflated drug prices in the US. It appears that the US Dept of Health and Human Services is now targeting these rebates:
Politico:
> **[Trump administration targets rebates blamed for inflating drug prices](https://www.politico.com/story/2019/01/31/trump-prescription-drugs-pricing-1140795)**
>
> The rule would fulfill part of President Donald Trump’s drug pricing blueprint
[EDIT] I’ll be adding more links as more sites cover the info. But it is not quite as clear-cut as I originally thought. The CNN story shows a more complicated outline for the proposal. And, as @Sam pointed out below, it only directly applies to Medicare/aid, and would need companion legislation to apply to private insurance.
Business Insider, my favorite site for medicine price articles:
> **[The Trump administration just proposed a ban on a little-known practice in the...](https://www.businessinsider.com/trump-administrations-proposes-pharmaceutical-rebate-ban-2019-1)**
>
> The aim is for patients to pay less for their drugs at the pharmacy counter, a major goal of the Trump administration.
The Hill:
> **[Trump officials make new moves to lower drug prices](https://thehill.com/policy/healthcare/427932-trump-administration-make-new-moves-towards-drug-pricing-transparency)**
>
> A new proposal from the Trump administration is targeting secretive rebates between drug manufacturers, insurers and pharmacy benefits managers as a way to lower drug prices for Medicare.
CNN:
> **[Trump proposal would upend drug industry by overhauling rebates in Medicare](https://www.cnn.com/2019/01/31/politics/trump-drug-prices-rebates-medicare/index.html)**
>
> The Trump administration unveiled a proposal Thursday that could radically change the way many drugs are priced and paid for in Medicare and Medicaid.
Washington Post:
> **[Trump administration proposes big changes in how prescription drugs are priced](https://www.washingtonpost.com/national/health-science/trump-administration-proposes-big-changes-in-how-prescription-drugs-are-priced/2019/01/31/8254aabc-2598-11e9-ad53-824486280311_story.html?noredirect=on)**
>
> The draft rule would bar the widespread practice of rebates for middlemen, spurring changes in how drugs are priced.
Reuters:
> **[U.S. government proposes rule overhauling drug industry rebate system](https://www.reuters.com/article/us-usa-healthcare-rebates/us-government-proposes-rule-overhauling-drug-industry-rebate-system-idUSKCN1PP30W)**
>
> The U.S. government on Thursday proposed a rule to end the industry-wide system ...
Bloomberg:
> **[Trump Targets Drug Middlemen With ‘Devastating’ Rebate Plan](https://www.bloomberg.com/news/articles/2019-01-31/trump-to-curb-protections-for-drug-rebates-blamed-for-high-costs)**
>
> The Trump administration proposed ending a complex system of drug rebates that influence tens of billions of dollars in U.S. pharmaceutical spending, a move that could upend the relationship between drugmakers and pharmacy benefits middlemen.
Wall Street Journal (behind paywall):
> **[Trump Administration Moves to Curb Drug Rebates in Medicare, Medicaid](https://www.wsj.com/articles/u-s-proposes-curbing-drug-rebates-in-some-medicare-medicaid-plans-11548971322)**
>
> The Trump administration proposed curbing billions of dollars in annual rebates that drugmakers give middlemen in Medicare and some Medicaid plans, a practice it has blamed for inflated prescription prices.
* * *
[MODS EDIT] This topic is an important one for all of us. But the forum also has a strict line on restricting political discussions to the politics subcat ONLY (which does not update the front page) because of past incidents. For the purpose of this thread:
- it is perfectly appropriate to discuss the issues and the plans
- it is not appropriate to discuss political affiliations and calculations. Posts deemed too political will be moved to the politics category.
Please make it possible for us to keep this thread going civilly and intelligently!
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### Author:  [@Sam](https://forum.fudiabetes.org/u/Sam)
#### Post date: [February 1, 2019, 10:28am UTC](https://forum.fudiabetes.org/t/us-federal-hhs-goes-after-medicine-rebates-to-middlemen/6376/2 "2019-02-01T10:28:47Z")
Thank God… although as the article notes, it will require congress to act in order to affect commercial insurers…
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### Author:  [@Chris](https://forum.fudiabetes.org/u/Chris)
#### Post date: [February 1, 2019, 3:06pm UTC](https://forum.fudiabetes.org/t/us-federal-hhs-goes-after-medicine-rebates-to-middlemen/6376/3 "2019-02-01T15:06:03Z")
And that right there is the sticky wicket. It is hard to get people who are relying on a big source of money to slay the dragon. I really really hope they do, and it is long overdue, but I am not holding my breath. This is such a no brainer
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### Author:  [@Sam](https://forum.fudiabetes.org/u/Sam)
#### Post date: [February 1, 2019, 3:16pm UTC](https://forum.fudiabetes.org/t/us-federal-hhs-goes-after-medicine-rebates-to-middlemen/6376/4 "2019-02-01T15:16:10Z")
And given the current divided government I really don’t expect the house of reps to hand the president a huge political victory like successfully slashing the price of prescription drugs…
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### Author:  [@Chris](https://forum.fudiabetes.org/u/Chris)
#### Post date: [February 1, 2019, 3:20pm UTC](https://forum.fudiabetes.org/t/us-federal-hhs-goes-after-medicine-rebates-to-middlemen/6376/5 "2019-02-01T15:20:16Z")
The real question will be when will we return to a moderate government and actually get ■■■■ done. While I have my personal beliefs, I also realize that too far to either side is a recipe for disaster. That used to be what made America great. finger crossed it becomes that way again.
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### Author:  [@Sam](https://forum.fudiabetes.org/u/Sam)
#### Post date: [February 1, 2019, 3:37pm UTC](https://forum.fudiabetes.org/t/us-federal-hhs-goes-after-medicine-rebates-to-middlemen/6376/6 "2019-02-01T15:37:45Z")
> [@Chris](#):
>
> finger crossed it becomes that way again.
Term limits would help
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### Author:  [@Sam](https://forum.fudiabetes.org/u/Sam)
#### Post date: [February 1, 2019, 3:53pm UTC](https://forum.fudiabetes.org/t/us-federal-hhs-goes-after-medicine-rebates-to-middlemen/6376/7 "2019-02-01T15:53:56Z")
> [@Chris](#):
>
> That used to be what made America great
I will not say it. I will not say it.
Joking aside, I think currently both political parties are so interested in proving the other one wrong that neither one is capable of coming together to pass something like this that’d truly benefit the American people.
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### Author:  [@jag1](https://forum.fudiabetes.org/u/jag1)
#### Post date: [February 1, 2019, 4:05pm UTC](https://forum.fudiabetes.org/t/us-federal-hhs-goes-after-medicine-rebates-to-middlemen/6376/8 "2019-02-01T16:05:33Z")
> [@Chris](#):
>
> The real question will be when will we return to a moderate government and actually get ■■■■ done. While I have my personal beliefs, I also realize that too far to either side is a recipe for disaster. That used to be what made America great. finger crossed it becomes that way again.
Unfortunately, a government that can “get things done” is what put us into this position in the first place. It was a bipartisan vote for the Medicare Modernization Act in 2003 that prevented Medicare/Medicaid from negotiating prices with drug companies. Although most of the blame goes to the Republicans (since they controlled both houses of congress and Bush was president who signed it into law), the vote had enough Democratic support to make it necessary to spread the blame around (11 of 54 Yea votes from Democrats in the senate; 9 of 216 Yea votes from Democrats in the house). [https://www.congress.gov/bill/108th-congress/house-bill/1/all-actions?overview=closed&q=%7B%22roll-call-vote%22%3A%22all%22%7D](https://www.congress.gov/bill/108th-congress/house-bill/1/all-actions?overview=closed&q=%7B%22roll-call-vote%22%3A%22all%22%7D)
Term limits might help, but fixing the money that flows into political election campaigns and the revolving door from congressperson to lobbyist is probably the only real fix. It certainly wasn’t in the best interest of all of us who require medications to survive in this country, and every person who voted for it and signed it into law knew that.This bill never would have passed if not for the huge amount of money going to both parties from the Drug industry.
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### Author:  [@MM2](https://forum.fudiabetes.org/u/MM2)
#### Post date: [February 1, 2019, 4:42pm UTC](https://forum.fudiabetes.org/t/us-federal-hhs-goes-after-medicine-rebates-to-middlemen/6376/9 "2019-02-01T16:42:48Z")
> [@Michel](#):
>
> only directly applies to Medicare/aid,
So could that lead to the non govt plans pick up the full load of what is reduced from those plans, and drug companies and PBMs still win.
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### Author:  [@John58](https://forum.fudiabetes.org/u/John58)
#### Post date: [February 1, 2019, 6:24pm UTC](https://forum.fudiabetes.org/t/us-federal-hhs-goes-after-medicine-rebates-to-middlemen/6376/10 "2019-02-01T18:24:04Z")
We are all getting frustrated waiting for the WA DC crowd to take on this issue. It’s my understanding (although I might be naive or wrong) that any one of the 50 state insurance commissioners or state legislatures can act on this any time they choose. I think with the WA DC crowd unable or unwilling to act, the individual states should be looked to for a legislative fix. I am continually frustrated that my state (WA) insurance commissioner and legislature act like puppets with the WA DC. crowd pulling the strings and just pass the buck all the time. Is there a state that is taking this issue on?
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### Author:  [@Michel](https://forum.fudiabetes.org/u/Michel)
#### Post date: [February 1, 2019, 7:07pm UTC](https://forum.fudiabetes.org/t/us-federal-hhs-goes-after-medicine-rebates-to-middlemen/6376/12 "2019-02-01T19:07:16Z")
MODS MESSAGE — no reflection on past posts but anticipation of future ones 🙂
This topic is an important one for all of us. But the forum also has a strict line on restricting political discussions to the politics subcat ONLY (which does not update the front page) because of past incidents. For the purpose of this thread:
- it is perfectly appropriate to discuss the issues and the plans
- it is not appropriate to discuss political affiliations and calculations. Posts deemed too political will be moved to the politics category.
Please make it possible for us to keep this thread going civilly and intelligently!
This post will also be added to the original post for the thread 🙂
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### Author:  [@docslotnick](https://forum.fudiabetes.org/u/docslotnick)
#### Post date: [February 3, 2019, 1:30am UTC](https://forum.fudiabetes.org/t/us-federal-hhs-goes-after-medicine-rebates-to-middlemen/6376/14 "2019-02-03T01:30:43Z")
The poor PBM’s are really looking out for the consumer. Why, they even say drug prices are affordable because of them. And don’t you know that laws like this will only raise premiums.
The PBM’s are liars and cheats, and our government has enabled their cheating up until now. They will just have to start operating in the sunlight to make a buck. HORRORS!!!
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### Author:  [@mike\_g](https://forum.fudiabetes.org/u/mike_g)
#### Post date: [February 4, 2019, 11:05am UTC](https://forum.fudiabetes.org/t/us-federal-hhs-goes-after-medicine-rebates-to-middlemen/6376/15 "2019-02-04T11:05:53Z")
Yep, they sure have been effective at keeping drug costs down, haven’t they? 😉
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### Author:  [@Sam](https://forum.fudiabetes.org/u/Sam)
#### Post date: [February 4, 2019, 7:56pm UTC](https://forum.fudiabetes.org/t/us-federal-hhs-goes-after-medicine-rebates-to-middlemen/6376/16 "2019-02-04T19:56:30Z")
Oh they’ll point to their tremendous success that you can get a drug that costs thousands for just a low copay of $50 or whatever because of them…
When of course the drug only actually really costs $40, but they’ve just managed to distort its listed price about 50x
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### Author:  [@docslotnick](https://forum.fudiabetes.org/u/docslotnick)
#### Post date: [February 6, 2019, 5:36pm UTC](https://forum.fudiabetes.org/t/us-federal-hhs-goes-after-medicine-rebates-to-middlemen/6376/17 "2019-02-06T17:36:37Z")
I just found a good article on how PBM’s operate. Give ita read, but keep your blood pressure pills closeby.
[https://www.healthaffairs.org/do/10.1377/hblog20180823.383881/full/](https://www.healthaffairs.org/do/10.1377/hblog20180823.383881/full/)
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### Author:  [@Chris](https://forum.fudiabetes.org/u/Chris)
#### Post date: [February 6, 2019, 5:53pm UTC](https://forum.fudiabetes.org/t/us-federal-hhs-goes-after-medicine-rebates-to-middlemen/6376/18 "2019-02-06T17:53:30Z")
Another area in our medical system that doesn’t make sense is Group Purchasing Organizations (GPO). In a normal business environment the end user (hospitals) would pay for these services by subscribing to a GPO and paying fees. The GPO is supposed to aggregate hospital purchases and negotiate discounts for the hospitals that subscribe. Congress allowed this to get set up backwards, so the GPO is funded by a portion of the product sales that it brokers. So the hospital doesn’t have to “pay” the manufacturer does. This leads to all kinds of perverse incentives, because if the GPO actually succeeds in reducing the price, then they get paid less money. While GPO’s tend to work well for commodity supplies, the system doesn’t work at all for the more expensive exclusive products. And in a normal business world without Congress’s rule making the current GPO model wouldn’t be allowed and these perverse incentives to keep prices high wouldn’t exist because the GPO and the hospital would be in alignment to try and get the best price from the manufacturers.
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### Author:  [@Sam](https://forum.fudiabetes.org/u/Sam)
#### Post date: [February 6, 2019, 6:13pm UTC](https://forum.fudiabetes.org/t/us-federal-hhs-goes-after-medicine-rebates-to-middlemen/6376/19 "2019-02-06T18:13:14Z")
I am so glad that this is finally coming into the public eye. I think the authors suggestions are far too complex but at least we’re discussing the ideas now. It’s time for the dysfunctional stranglehold PBMs put on the market to end.