Nearly 20,000 comments have been submitted in response to the Department of Health and Human Services January 31, 2019 notice of proposed rulemaking eliminating discount safe harbor protection for reductions in price to prescription pharmaceutical products (or rebates) provided by manufacturers to plan sponsors under Medicare Part D and Medicaid managed care organizations (MCOs), whether negotiated by the plan or by pharmacy benefit managers (PBM) or paid through a PBM to the plan or Medicaid MCO. Most of the comments appear to be relatively short, text box comments submitted by individuals through patient or business advocacy groups.  The following is a very high level summary of the several hundred comments posted (so far) from health plans, manufacturers, pharmacies, their respective associations, and policy oriented groups:

  1. Manufacturers and pharmacies and their respective associations, including some large chains (i.e., Walgreens) strongly favor eliminating rebates, and curtailing the flexibility of “middlemen” who negotiate rebates and administer the system, noting the perverse incentives that rebates cause for plans and PBMs with respect to drugs that have high list prices.
  2. Many comments from health plans and a number from others (e.g., the AHA and AARP) take the view that is summed up in this paragraph in the comment submitted by the American Federation of State, County, and Municipal Employees (AFSCME):
      1. While we agree with the broad goals of the rule, we have significant concerns about the impact it will have. The proposed rule is a shot in the dark, with deep uncertainty about whether it will further these goals. This uncertainty includes unanswered questions about whether beneficiaries on average (and which individuals in particular) will ultimately pay less out of pocket in combined cost-sharing and Part D premiums, and whether list prices, net prices and overall costs will decrease.
  3. AARP also has some pithy language about the uncertainty of the projections made by the agency, a sentiment that is expressed in many other comments:
      1. Throughout the proposed rule, HHS makes it clear that it does not know whether prescription drug prices will increase, decrease, or stay at the same levels if rebates are eliminated. Similarly, the alternative scenarios present a broad range of possible impacts on drug prices. In some scenarios, manufacturers replace rebates with discounts. In others, manufacturers partially replace rebates with discounts. In at least one scenario, manufacturers respond by raising drug prices.  Given that prescription drug price trends are already widely viewed as unsustainable, we find this high degree of uncertainty to be extremely concerning. Moreover, it is a strong indication that this proposal is not directed at the root cause of the problem that it is trying to address—the pricing behavior of drug manufacturers
  4. Most health plans note that rebate negotiation is a key tool used to lower net prices for plans that serve Medicare beneficiaries, and several note that rebates were a response to high list prices for drugs, and not the cause of high list prices, as stated in the proposed rule.
  5. Most commenters voiced significant reservations about implementing the changes as contemplated by January 1, 2020.
  6. Comments from several patient advocacy groups expressed concern over potential unintended consequences to patients, such as benefit plan changes that might place products on higher formulary tiers or eliminate flat fee cost sharing.
  7. A lot of comments make the point that most drugs do not generate rebates, including generics and the highest cost brand name drugs for which no substitute exists.
  8. Several comments from think tanks or research institutes (e.g., MedPAC, Pew Charitable Trust) comment on the uncertainty of the savings for beneficiaries, and the likelihood of increased costs for the Medicare program under the proposed changes, and suggest alternative strategies that would more directly address high prescription drug prices.
  9. A lot of comments raised the resulting uncertainty for value based arrangements, which almost by definition require retrospective changes in pricing (e.g., pricing depends on whether the product has or has not met the value proposition being tested).
  10. Many comments noted the harm that will result for the Medicaid program because out of pocket costs of Medicaid beneficiaries are usually low, fixed payments, but plans and the state do depend on rebates to lower overall costs.
  11. Some comments hinted at the potential legal theories that will be used to challenge the final rule—but especially whether the rule conflicts with the “non-interference” statute that Congress adopted to prevent the agency from controlling price negotiations between manufacturers and Part D plans.