The Trump administration is close to issuing a new rule that could effectively ban rebate payments from drug manufacturers to pharmaceutical benefit managers, or PBMs. The plan is misguided. A full ban would backfire and increase costs to consumers.
The regulation, now under review at the Office of Management and Budget, could remove the safe-harbor protection for rebate payments under an anti-kickback law. But rebates are price discounts, not kickbacks. They reduce prices based on sales volume: Drug companies charge less when more of their drugs are sold to patients.