The halt follows a memo last month from White House chief of staff Ron Klain directing agencies to halt new and pending regulations from going into effect to ensure Biden officials have the opportunity to review them.
The regulation would effectively ban drug makers from providing rebates to pharmacy benefit managers and insurers — a radical change in the way many drugs are priced and paid for in Medicare and Medicaid. Instead, drug companies will be encouraged to pass the discounts directly to patients at the pharmacy counter.
The Trump administration had backed down from issuing this rule in 2019 after it was found to raise costs for seniors and the federal government, but issued the final rule in November.
The Pharmaceutical Care Management Association, which represents pharmacy benefit managers, sued the Trump administration to stop implementation of the rule. The group, along with America’s Health Insurance Plans, argue that it would benefit drug manufacturers. A federal judge last week put the case on hold pending a review by the Department of Health and Human Services.
Insulin and EpiPens
The agency is also freezing a Trump rule requiring Federally Qualified Health Centers, which provide primary care services to underserved communities, to pass along discounts they receive on insulin and EpiPens to their patients.
The rule only affects medications these centers purchased through the 340B drug discount program, not the prices of these drugs for the general public.
Trump officials said the rule would increase access to these medications among the 28 million people who visit the centers annually, over 6 million of whom are uninsured.
The rule was to have taken effect on January 22 but was delayed to March 22 to give Biden’s health officials time to review it and consider new regulations.
Community health centers opposed the rule, saying it would backfire and make it harder for them to provide these medications, particularly during the pandemic. They already offer sliding fee discounts to low-income patients, according to the National Association of Community Health Centers, an industry group.
Biden’s drug-price goals
The Department of Health and Human Services issued in a final rule in late September establishing a path for states and certain other entities to set up drug importation programs.
In late November, the agency issued to a final rule that calls for Medicare to pay the same price for certain expensive prescription drugs as other developed nations, a “most-favored-nation price.”
Other nations typically pay far less for medications, in large part because their governments often determine the cost — which runs counter to Republicans’ allegiance to the free market system.
Federal courts temporarily halted implementation of the rule after multiple industry groups filed lawsuits.