White House kills drug rebate rule

Alex Azar

HHS Secretary Alex Azar warned in April that any policy that fails to address drug rebates “will simply not get list prices down.” | Alex Wong/Getty Images

The Trump administration has withdrawn its sweeping proposal to eliminate rebates from government drug plans, a White House spokesperson confirmed to POLITICO.

“Based on careful analysis and thorough consideration, the president has decided to withdraw the rebate rule,” spokesperson Judd Deere said in a statement. “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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The proposal — a centerpiece of the Trump administration’s strategy to reduce drug prices — had split HHS and the White House. HHS Secretary Alex Azar had argued that eliminating rebates would lead to lower list prices, warning in April that any policy that fails to address rebates “will simply not get list prices down.” But the proposal had faced resistance from domestic policy chief Joe Grogan and other fiscal hawks on grounds that it was too expensive — costing the government nearly $180 billion over a decade.

Some lawmakers also worried the rule would raise seniors’ Medicare Part D premiums.

Axios first reported that the White House was pulling the rule.

In a statement today, HHS pointed to ongoing efforts to reduce drug prices.

“Secretary Azar is fighting alongside President Trump to lower prescription drug costs and protect America’s seniors,” HHS spokesperson Caitlin Oakley said. “President Trump and Secretary Azar are taking bold action to end foreign free riding, examine how to safely import lower-cost prescription drugs, empower patients with meaningful transparency, and the list goes on.”