Trump abandons plan to reduce drug price rebates

The Trump administration has abandoned a centerpiece of its efforts to address high drug prices, backing away from requiring some discounts to be passed directly to consumers under Medicare potentially lowering patients’ out-of-pocket costs.

President Donald Trump announced the proposal with great fanfare in January as part of the administration’s efforts to deal with the rising costs of prescription drugs, which have fueled public outrage. But the decision to kill the proposal is the second time this week that Trump’s drug-pricing initiatives have failed. On Monday, a federal judge threw out a rule that would have required pharmaceutical companies to list the price of their drugs in television advertisements.

In a statement Thursday, Judd Deere, a White House spokesman said, “Based on careful analysis and thorough consideration, the president decided to withdraw the rebate rule.”

The rebate rule had long met resistance from within the White House, where fiscal conservatives had balked at the potential cost. The rule was expected to raise drug-plan premiums for all Medicare beneficiaries, and in May, the nonpartisan Congressional Budget Office concluded that the rule, if adopted, would cost taxpayers $177 billion within 10 years.

The administration and leading members of Congress are discussing some other legislative proposals, including negotiating directly with companies to set caps on some drug prices. The president also announced last week that he would issue an executive order that might somehow connect prices in the United States to those charged by companies in overseas markets, but the details remained unclear.

The rule had been opposed by the insurers and pharmacy benefit managers who operate Medicare’s drug plans.