May 3, 2018

FDA takes aim at drug pricing rebates

FDA Commissioner Scott Gottlieb criticized drug rebates Thursday. Photo: Zach Gibson/Getty Images

FDA Commissioner Scott Gottlieb said at an industry conference Thursday that the government could re-examine the federal law that says prescription drug rebates aren't considered kickbacks.

Why it matters: Gottlieb said the nation's rising drug prices are due in part to "the system of rebates between payers and manufacturers." Making rebates illegal would take a hatchet to companies like pharmacy benefit managers, but it's unclear how it would affect what the country ultimately pays for drugs.

The big picture: Drug companies continue to raise the prices of their medications, although industry data show they are offering bigger rebates back to PBMs and health insurers in exchange for favorable placements on their covered drug lists.

  • Eliminating rebates would get at the serious problem of some middlemen manipulating drug prices for their own gain.
  • A major class-action suit that targets insulin makers and PBMs argues rebates are nothing more than kickbacks.
  • Changing federal kickback law presumably would force health insurers and PBMs to drive for harder bargains instead of running to whichever drug company offered the most appetizing rebate.

Yes, but: Gottlieb's statement is significant, but it also shows how he and Health and Human Services secretary Alex Azar still would prefer to reform the supply chain of prescription drugs. Even without rebates, pharmaceutical companies would have the power to charge whatever they want.

Go deeper

Amid racial unrest, a test at the polls

Photo: Stephen Maturen/Getty Images

Eight states plus D.C. are holding primary elections today following a week of intense protests across the country over the brutal police killing of George Floyd.

Why it matters: It's the first major test for voting since the national outcry. Concerns over civil unrest and the police — as well as the coronavirus and expanded absentee voting — could reduce the number of voters showing up in person but heighten tensions for those who do.

Axios-Ipsos poll: America’s big racial divide on police, virus

Data: Ipsos/Axios survey; Note: ±3.2% margin of error; Chart: Andrew Witherspoon/Axios

A new Axios-Ipsos poll finds that America has a massive racial gulf on each of our twin calamities — trust in police, and fear of the coronavirus.

  • 77% of whites say they trust local police, compared with just 36% of African Americans — one of many measures of a throbbing racial divide in Week 11 of the Axios-Ipsos Coronavirus Index, taken the week George Floyd was killed by a white policeman in Minneapolis.
Updated 50 mins ago - Politics & Policy

Updates: George Floyd protests nationwide

Police officers wearing riot gear push back demonstrators outside of the White House on Monday. Photo: Jose Luis Magana/AFP via Getty Images

Protests over the death of George Floyd and other police-related killings of black people continued for a seventh day across the U.S., with President Trump threatening on Monday to deploy the military if the unrest continues.

The latest: Four police officers were struck by gunfire while standing near a line in St Louis on Monday after a peaceful demonstration, Police Chief John Hayden said early Tuesday. They were all taken to hospital with non-life threatening injuries. He said a small group of people had thrown rocks and fireworks at police officers.