CVS Health sent letters to 60 drugmakers asking them not to increase the net costs of their drugs in response to a proposed rule that would overhaul the rebate system, according to an Inside Drug Pricing news report.
HHS proposed a rule Jan. 31 that would eliminate rebates — the discounts drugmakers pay to pharmacy benefit managers. The rebate ban, which is expected to be finalized before health plans' deadline to submit 2020 Medicare bids in three months, would cut profits for PBMs and health insurers.
The ban also would make it hard for insurers to accurately set Medicare Part D premiums.
Medicare plans rely on drugmakers' existing prices to design plans for the upcoming year, and they would need to redesign those plans if drugmakers increased drug prices.
Rebates also been have been used to keep insurance premiums low, but if rebates are instead passed along to patients at the pharmacy counter, patient premiums could go up.
HHS officials said health plans will do all they can to keep these increases as small as possible.
CVS Health has asked drugmakers to commit to not raising the price insurance plans pay for their drugs, no matter how the final rule shakes out, so that it can accurately set Medicare Part D bids for 2020.
"In the best possible scenario, this would give the Part D Plans just 26 days to adjust their bids in response to any final rule," CVS said in a letter to drugmakers, according to Inside Drug Pricing. "We require assurances that, regardless of the issuance of any final rule, you will, at a minimum, honor the financial value of your current offer and continue to provide to the Part D plans the same or lower net effective drug price for calendar year 2020."
Read the full report here.