Drug Rebate ‘Safe Harbor’ Axed in Highly-Anticipated Proposal (1)

The legal status now protecting controversial drug rebates would be flipped upside down under a highly-anticipated proposal released Jan. 31.

Drug rebates paid by drugmakers to middlemen and insurance plans providing coverage through Medicare’s Part D drug program or Medicaid would no longer be protected from federal anti-kickback laws under proposed regulation from the Health and Human Services Department.

The anti-kickback statute prevents transactions “intended to induce or reward referrals for items or services reimbursed by federal health care programs.” However, drug rebates are currently exempted from that statute and those exemptions are often referred to as “safe harbors.”

The ...