HHS Proposes to Eliminate Safe Harbor Protections for Manufacturer to PBM Rebates

Mar 05, 2019

The proposed regulation would exclude rebates from safe harbor protections that currently protect drug manufacturers’ rebates from penalties under the federal Anti-Kickback Statute, and would create a new safe harbor for discounts offered direct to patients, as well as fixed-fee service arrangements between drug manufacturers and PBMs.

HHS says that the new rule will counteract incentives behind higher list prices. According to HHS, rebates that today equal 26% to 30% of a drugs’ list price could be passed directly to patients and reflected in what individuals pay at the pharmacy counter.

The proposed regulation, if finalized, would have significant implications for the entire drug distribution channel. The rule would apply to the Medicare and Medicaid programs.