The suspension follows a memo last month from the White House chief of staff, Ron Klain, instructing the agencies to prevent new pending regulations from coming into effect to ensure that Biden officials have the opportunity to review them.
The regulation would effectively prohibit drug manufacturers from offering discounts to pharmaceutical benefit managers and insurers – a radical change in the way that many drugs are valued and paid on Medicare and Medicaid. Instead, pharmaceutical companies will be encouraged to pass discounts directly to patients at the pharmacy counter.
The Trump administration gave up issuing this rule in 2019 after it raised costs for the elderly and the federal government, but issued the final rule in November.
The Pharmaceutical Care Management Association, which represents pharmaceutical benefit managers, sued the Trump administration to stop implementing the rule. The group, along with America’s Health Insurance Plans, argues that it would benefit drug makers. Last week, a federal judge suspended the case pending a review by the Department of Health and Human Services.
Insulin and EpiPens
The agency is also freezing a Trump rule that requires Federally Qualified Health Centers, which provide primary care services to underserved communities, to pass on the discounts they receive on insulin and EpiPens to their patients.
The rule affects only drugs purchased by these centers through the 340B drug discount program, not the prices of those drugs to the general public.
Trump officials said the rule would increase access to these drugs among the 28 million people who visit the centers annually, more than 6 million of whom are uninsured.
The rule was due to go into effect on January 22, but has been postponed to March 22 to give Biden health officials time to review it and consider new regulations.
Community health centers opposed the rule, saying it would backfire and make it difficult to provide these drugs, especially during the pandemic. They already offer discounts for low-income patients, according to the National Association of Community Health Centers, an industry group.
Biden drug price targets
The Department of Health and Human Services issued a final rule in late September establishing a way for states and other entities to establish drug import programs.
In late November, the agency issued a final rule requiring Medicare to pay the same price for certain expensive drugs as other developed nations, a “most favored nation price”.
Other nations typically pay much less for drugs, largely because their governments often determine the cost – which goes against Republicans’ allegiance to the free market system.
Federal courts temporarily suspended implementation of the rule after several industry groups filed lawsuits.