On Thursday, the White House announced that President Trump will cancel a plan to alleviate the financial burden of expensive drugs for people on Medicare. This will allow them to get rebates which drug manufacturers currently pay to middlemen and insurers.
The decision was made after the Budget Office estimated that the plan would not have any substantial effects on drug maker prices and cost the Medicare program approximately $175 billion in the next 10 years.
The withdrawal of the rebate plan was “based on thorough consideration and careful analysis”, said Judd Deere – spokesman of the White House. It wasn’t still clear whether it meant the termination of the discussion on rebates as other similar proposals would be debated in the Congress.
Judd Deere said that the President doesn’t forget his promise to reduce drug costs. Those people who take very costly drugs for rheumatoid, cancer, and other health issues would now have copays rivaling a mortgage payment.
“The administration is aware of raising bipartisan debates about legislation to lower outrageous medication prices on our citizens, and the President will use any tools to make sure that prescription medication expenses will keep declining,” said Deere.
On Monday, a federal judge ruled that the government doesn’t have the legal power to ask drug manufacturers to show list prices in TV commercials. But a Republican senator is pushing to grant the administration such authorities.
The withdrawing decision on rebates seemed to be a great opportunity for middlemen, employers, and insurers who administer prescription medication plans for most insured patient blocks. Shares of some major firms in this area began to increase early the same day.
It appeared to be a defeat for the pharmaceutical industry. Drug manufacturers favored the consumer rebate plan to other campaigns that legislation is debating.
Overall, the prices of prescription medications have already stabilized. The government credits the President for this improvement, but experts suggest that this trend is not completely obvious yet. The inflation index of the government for drugs also contains lower-priced generics, while most people are concerned about other high-priced brands.
Rebates are a mainly secret aspect of the complicated world of medication pricing. Under the new plan, manufacturer rebates currently gone to insurance firms and middlemen might have been directly paid to Medicare’s seniors after filling their prescriptions. But analysts believed that drug firms won’t reduce list prices to respond to the plan. Instead, they might reimburse pharmacies for promotions.