Initial US Health Plan Disclosures On Drug Rebates And Patient Cost Sharing Postponed
Executive Summary
Postponement of the transparency requirement established via late 2020 legislation may mean data from health plans may not be publicly available until 2024.
The Biden Administration is postponing for one year the deadline of the first in an ongoing series of required annual reports from government-sponsored and commercial health plans to the federal government disclosing drug manufacturer rebates and their impact on health coverage premiums.
The initial reports, which will include 2020 and 2021 data, now are due 27 December 2022, instead of 27 December 2021, to give plans more time to set up the systems needed to comply, according to recently-released guidance from the Health and Human Services, Labor and the Treasury departments.
After the reports are submitted to the departments, the data will be aggregated and then released publicly. Plans will be required to submit subsequent reports to the government no later than 1 June of each subsequent year.
The requirement that plans report rebates and any reduction in premiums and out-of-pocket costs associated with such price concessions was established in omnibus spending legislation signed into law in December 2020. (Also see "Drug Rebates, Impact On Premiums Must Be Disclosed Under COVID Stimulus Law" - Pink Sheet, 29 Dec, 2020.) The reports will also include overall data on spending trends on other services, such as hospital costs, health care provider payments broken down by primary and specialty care and wellness services.
The data disclosures related to drug pricing are expected to help inform the debate over rebate reform. But now it’s likely such data may not be publicly available until 2024. By then, it’s unclear whether the rebate rule issued by the Trump Administration will still be on the books. It's implementation has been suspended by the courts and Congress may ultimately decide to withdraw it to use the savings generated to offset spending on Democratic legislative priorities related to education, health care and climate change. (Also see "The Rebate Rule: US Pricing Proposal Becomes Congressional Piggy Bank" - Pink Sheet, 26 Aug, 2021.)
The departments intend to issue regulations implementing the pharmacy benefit and drug cost reporting requirements, the “frequently asked questions” document notes. However, “the departments recognize the significant operational challenges that plans and issuers may encounter in complying with these reporting requirements by the statutory deadlines.” The departments “anticipate that plans and issuers also may need additional time to modify contractual agreements to enable disclosure and transfer of the required data.”
Plans ‘Strongly Encouraged’ To Prepare For Reports In 2022
Until regulations or further guidance is issued, the departments “strongly encourage plans and issuers to start working to ensure that they are in a position to be able to begin reporting the required information” by late 2022. HHS additionally “encourages states that are primary enforcers of this requirement with regard to issuers to take a similar enforcement approach" and said it "will not determine that a state is failing to substantially enforce this requirement if it takes such an approach.”
Under the new law, plans must detail rebates and other remuneration paid by manufacturers for each therapeutic class of drugs, amounts paid for each of the 25 drugs that yielded the highest amount of rebates during the year, and any reduction in premiums and out-of-pocket costs associated with rebates.
Also required is:
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Information on the 50 most frequently dispensed brands paid for by the plan and the total number of paid claims for each drug;
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The 50 most costly prescription drugs by total annual spending, and the annual amount spent for each such drug;
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The 50 prescription drugs with the greatest increase in plan expenditures over the preceding plan year, along with the change in amounts expended by the plan per drug; and
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The change in amounts expended by the plan or coverage in each plan year for each drug.