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Options for Implementing OIG’s Proposed Rule on the Pharmaceutical Rebate Safe Harbor

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April 2019
Aaron Vandervelde, Mara Mitchel, and Jerry Lewandowski
BRG white paper

On February 6, 2019, the US Department of Health and Human Services (HHS) published a proposed rule to eliminate the anti-kickback statute safe harbor for Medicare Part D and Medicaid Managed Care drug rebates paid to pharmacy benefit managers (PBMs) by pharmaceutical manufacturers. The proposed rule contemplates new safe harbors to make net drug prices available at the point of service. This would be accomplished through a new chargeback system between the manufacturer and the pharmacy to account for the difference between a drug’s list price and a negotiated net price.

In this paper, Aaron Vandervelde, Mara Mitchel, and Jerry Lewandowski discuss two approaches that may be used to implement this proposed “variable chargeback” safe harbor, highlight potential operational challenges and benefits of each approach, and assess how various stakeholders in the pharmaceutical supply chain may be impacted.

Read the full paper.

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