Press Releases
July 20, 2018


Washington, D.C. – Better Medicare Alliance (BMA) President and CEO Allyson Y. Schwartz released the following statement in response to a proposed rule by the Department of Health and Human Services (HHS) Office of Inspector General (OIG) on the removal of Safe Harbor Protection for Rebates:


“Better Medicare Alliance has taken a keen interest in the Administration’s plan to tackle high prescription drug costs for Medicare beneficiaries. We recognize the cost to beneficiaries as a serious concern that deserves effective solutions that would protect American seniors and individuals with disabilities from debilitating costs for vital medications.


“High drug prices start with drug manufacturers who set prices for their products independently and can increase them at will. Hence, we must address transparency around base drug prices set by drug manufacturers including in particular specialty drugs that are high-cost and main drivers of rising out-of-pocket costs.   


“We are concerned that this proposal will not result in lower costs for Medicare beneficiaries and may actually achieve the opposite effect with adverse consequences for Part D premiums. A recent study by Oliver Wyman revealed that rebates have reduced costs in Medicare Part D by $34.9 billion and eliminating them would cause Part D premiums to rise by 52 percent in 2018 alone.


“Health plans and pharmacy benefit managers (PBMs) are well equipped to negotiate drug costs for patients because they work in an integrated, capitated system. Restricting the ability of health plans and PBMs to negotiate drug prices on behalf of beneficiaries is ill-advised. The fact is that PBMs in Part D will save the Federal government and seniors nearly $900 billion in costs from 2016-2025. PBM’s variety of tools used to drive value for beneficiaries in Part D should be maintained and not dismantled.


“On behalf of our community of 115 ally organizations and nearly 400,000 Medicare Advantage beneficiaries, it is imperative that the Administration protect high-quality, affordable prescription drug coverage provided in Medicare Advantage. We strongly urge the Administration to reconsider its proposal and work with stakeholders to achieve viable solutions to address drug pricing.”


Sign Up for Policy Alerts

Sign up to receive exclusive updates on Medicare Advantage policy.