Big Pharma Wins: White House Kills Prescription Drug Rebate Plan

(AP Photo/Jim Mone)

It was a good idea, so naturally Washington killed it.

In his ongoing efforts to reduce the prices consumers pay at the counter for prescription drugs, President Trump proposed curbing “billions of dollars in annual rebates that drugmakers give middlemen in Medicare.” As the WSJ described it this morning, the “plan had been to curtail the rebates worked out between drugmakers and third parties that manage benefits for Medicare as well as Medicaid managed care, where states contract with insurers to deliver benefits. The government sought instead to redirect those discounts toward patients.”


Nice, eh? The beneficiaries of Trump’s proposed regulatory rule would have been people who need expensive medications, the price of which is inflated through crony capitalist shenanigans. The only people who would be hurt by the plan are the vested interests who for decades have used Medicare/Medicaid as a multibillion-dollar slush fund.


The decision reflects months of tension between the White House and the Department of Health and Human Services over the proposal, which also spurred a backlash from pharmacy-benefit managers that administer prescription-drug programs.

Health and Human Services Secretary Alex Azar, who backed the idea, had clashed with senior White House advisers who had sought to delay or water down the proposal, according to four people familiar with the discussions.

I hate to be the Debbie Downer on a beautiful summer day, with the Rocky Mountain sky glowing deep blue through my office window, but this is terrible news. And the reason goes beyond the mere murder of what could have proven to be a deeply beneficial health care reform.

Taking slush money back from well-heeled groups like Cigna’s Express Scripts, CVS Caremark, and UnitedHealth’s OptumRx, and putting it in the hands of sick people… well, that’s as close to a political no-brainer as I’ve ever seen. Yet the vested interests in Washington were powerful enough to strangle it in the crib.


White House spokesman Judd Deere tried to put a gloss on the sad situation, saying in a press release, “Based on careful analysis and thorough consideration, the President has decided to withdraw the rebate rule. 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.”

Oh, come on. Trump is going to get something meaningful through Nancy Pelosi’s House and Mitch McConnell’s Senate when he couldn’t even get his own plan past his own White House? Anything is possible, but the idea of Pelosi giving Trump a victory over Dem-leaning Big Pharma — during the run-up to his reelection, no less — strains credulity. Sure, the White House had to release some kind of statement, but nobody is buying this one.

We seem to have reached the point of no return on Big Government and Big Pharma sucking America dry, when not even an anti-establishment president like Trump can push a simple (but meaningful) reform through the branch of government he’s ostensibly in charge of.


If you need cheering up at this news, my advice is to go outside and enjoy the summer weather — and try not to get sick.


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