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Trump Administration Withdraws Harmful Drug Rebate Safe Harbor Rule

July 15, 2019 / EDWIN PARK

On July 10, the Trump Administration announced that it would withdraw a proposed rule to eliminate the safe harbor in the federal anti-kickback law for rebates negotiated by pharmacy benefit managers (PBMs) on behalf of Medicaid managed care plans and Medicare Part D plans.  This is a highly welcome move.  As we have explained since the proposed rule was unveiled, if it had been finalized, the rule would have seriously harmed Medicaid.  Instead of helping state Medicaid programs better address rising prescription drug costs, the rule would have increased net federal and state Medicaid drug spending and would likely have ultimately led to states making cuts to their Medicaid programs that adversely affect low-income beneficiaries including children and families.