Trump administration proposes rolling back drug rebates

HHS and the Office of Inspector General formally released a long-awaited proposal Thursday that would eliminate drug price reductions, called rebates, in Medicare and Medicaid. Instead, those rebates offered by drug companies to insurance middlemen would lower what people pay at the pharmacy counter.

The big picture: The Trump administration has signaled for months it wanted to overhaul the drug rebate system. The pharmaceutical industry praised the proposal, which would go into effect Jan. 1, 2020, because it wouldn't limit how drugs are priced, but insurers and pharmacy benefit managers have already warned they would raise premiums to offset any loss of rebates.