U.S. health secretary says agency has power to eliminate drug rebates

HHS Secretary Alex Azar says it is within his agency's power to eliminate rebates on prescription drug purchases, asserting they create a perverse incentive to continuously raise drug prices. HHS last month proposed regulations that would scale back protections for rebates that might otherwise be illegal under a federal anti-kickback law.

HHS Secretary Alex Azar says it is within his agency's power to eliminate rebates on prescription drug purchases, asserting they create a perverse incentive to continuously raise drug prices. HHS last month proposed regulations that would scale back protections for rebates that might otherwise be illegal under a federal anti-kickback law. The PBM industry has challenged that move, saying HHS cannot eliminate rebates on its own and would need Congress to change the federal statute. The ultimate responsibility for high drug prices, those companies say, lies with the manufacturers who set those prices. Azar contends that the current rebates are a product of previous HHS regulation, adding that "What one has created by regulation, one could address by regulation." He has not indicated when such new regulations, which are being reviewed by the Office of Management and Budget, might take effect. Since May, HHS has given Medicare Advantage health plans, which are administered by private-sector health insurers, new tools to lower prescription drug costs. FDA has unveiled a plan to boost the use of biosimilars, and Azar has directed that agency to establish a working group to study how to import drugs safely from other countries if a drugmaker dramatically raises prices.