Jul 21, 2021 - Health

Dems eye big savings from repealing Trump's drug pricing rule

Illustration of money pouring into a prescription bottle. 

Illustration: Aïda Amer/Axios

Repealing one of former President Trump's last big moves on drug pricing may go a long way toward helping Democrats pay for two of their big legislative priorities.

The big picture: Repealing Trump's regulations on drug rebates could give Democrats upwards of $100 billion to help pay for other priorities.

Where it stands: Repealing Trump's rebate rule has been pitched as a way to help pay for both a bipartisan infrastructure deal and Democrats' partisan "soft infrastructure" push.

  • One industry source said Democrats could claim savings from delaying Trump's rebate regulations in a bipartisan infrastructure bill — then more savings from repealing it their a party-line reconciliation measure.
  • “It has become the most popular offset in both packages’ debate," said one source familiar with the negotiations.

The intrigue: The rule hasn't actually gone into effect.

  • But because the Trump administration finalized it, its cost was folded into baseline spending projections, so Democrats can still claim savings on paper from repealing it.

Details: In 2019, the Congressional Budget Office estimated that the rule would cost the federal government $177 billion over 10 years.

  • It was projected to lower some patients' out-of-pocket costs, but to increase Medicare premiums. Critics argued that it wouldn't effectively address the overall cost of drugs.

What they're saying: Insurers and pharmacy benefit managers would be thrilled if the rule were repealed. Pharma wants to keep the rule in place.

  • "If it is included in the infrastructure package, this proposal will provide health insurers and drug middlemen a windfall and turn Medicare into a piggybank to fund projects that have nothing to do with lowering out-of-pocket costs for medicines," said Debra DeShong, executive vice president of public affairs at PhRMA.
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