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.

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Elliott Abrams to replace Brian Hook as Trump's Iran envoy

Brian Hook. Photo: Tayfun Coskun/Anadolu Agency via Getty Image

President Trump's Iran envoy, Brian Hook, is stepping down, Secretary of State Mike Pompeo confirmed Thursday. He will be replaced with Venezuela envoy Elliott Abrams, a noted Iran hawk who will serve in both roles.

Why it matters: Hook had been tasked with executing Trump's "maximum pressure" policy toward Iran, working closely with Pompeo. That strategy has deepened tensions and thus far failed to force Iran back to the negotiating table, as Trump had hoped.

Ohio Gov. Mike DeWine tests positive for coronavirus ahead of Trump visit

Photo: Justin Merriman/Getty Images

Ohio Gov. Mike DeWine (R) has tested positive for COVID-19 and plans to quarantine at his home for the next 14 days, his office announced Thursday. He currently has no symptoms.

Why it matters: The 73-year-old DeWine was set to meet President Trump Thursday on the tarmac at an airport in Cleveland and was tested as part of standard protocol. He is the second governor known to have contracted the coronavirus, after Oklahoma Gov. Kevin Stitt (R).

Updated 1 hour ago - Politics & Policy

Coronavirus dashboard

Illustration: Eniola Odetunde/Axios

  1. Global: Total confirmed cases as of 12:30 p.m. ET: 18,860,908 — Total deaths: 708,676— Total recoveries — 11,394,821Map.
  2. U.S.: Total confirmed cases as of 12:30 p.m. ET: 4,834,546 — Total deaths: 158,445 — Total recoveries: 1,577,851 — Total tests: 58,920,975Map.
  3. Politics: Pelosi rips GOP: "Perhaps you mistook them for somebody who gives a damn" — Ohio Gov. Mike DeWine tests positive.
  4. Public health: Fauci says task force will examine aerosolized spread.
  5. Business: July's jobs report could be an inflection point for the recovery — Teladoc and Livongo merge into virtual care giant.
  6. Sports: Where college football's biggest conferences stand on playing.