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Photo: George Frey/Getty Images

Wall Street panicked a little after the Trump administration rolled out its drug rebate proposal, but the stock prices of companies most at risk recovered because there’s still so much uncertainty about how the policy would change their businesses.

The big picture: The proposal would bar pharmacy benefit managers and insurers from accepting rebates from drug companies in Medicare and Medicaid under anti-kickback law. Instead, the two sides could work out fixed-fee arrangements, with rebates flowing directly from manufacturers to patients at the pharmacy counter.

Yes, but: The rule...

  • Would not immediately affect the commercial market, although HHS Secretary Alex Azar wants Congress to pass the proposal into law so it would apply everywhere.
  • Would not touch the other profitable tactics that PBMs have mastered, like spread pricing and generic drug algorithms.
  • Would take a swipe at a flawed rebate system, but push middlemen to raise premiums — which federal actuaries said could raise Medicare spending as much as $196 billion over the next decade.
  • Would almost certainly initiate a lawsuit on antitrust grounds.
  • Would "not have a meaningful impact on our growth or earnings trajectory," David Cordani, CEO of Cigna and its newly acquired Express Scripts, said on an earnings call Friday.

One thing that is pretty certain: Pharma wins. There’s no mandate to lower list prices, and drug companies would get to see competitors' rebates.

Go deeper: The Trump administration's major shakeup in the way we pay for drugs

Go deeper

Miriam Kramer, author of Space
34 mins ago - Science

NASA's Mars helicopter is a test for the future of space exploration

Ingenuity (left) with Perseverance on Mars. Photo: NASA/JPL-Caltech/MSSS

NASA is set to fly the first test flight of its tiny Ingenuity helicopter on Mars Sunday, marking the advent of drones for space exploration.

Why it matters: If successful, this flight will be the first time a human-built aircraft has flown on a world other than Earth, opening the door to new means of exploring planets far from our own.

Bryan Walsh, author of Future
2 hours ago - Politics & Policy

The global future is looking dark and stormy

Illustration: Rae Cook/Axios

A new 20-year-forecast for the world: increasingly fragmented and turbulent.

The big picture: A major report put out this week by the National Intelligence Council reflects a present rocked by the COVID-19 pandemic. How the next two decades will unfold depends largely on whether new technologies will ultimately unite us — or continue to divide us.

11 hours ago - Politics & Policy

Rep. Gaetz declares he's "not going anywhere" amid sex trafficking probe

Rep. Matt Gaetz. Photo: Eva Marie Uzcategui/Bloomberg via Getty Images

Rep. Matt Gaetz (R-Fla.) doubled down Friday night, saying he's not "going anywhere," and vowing, "I have not yet begun to fight," amid a federal investigation into sex trafficking allegations.

What he's saying: “I’m built for the battle, and I’m not going anywhere,” Gaetz, who denies the allegations, said during a Women for America First event at the Trump National Doral Miami resort.