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CAPD Statement on the CBO Score of the HHS Safe Harbor Rule

Debra Barrett, Executive Director of the Coalition for Affordable Prescription Drugs, released the following statement today on the Congressional Budget Office’s (CBO) score on the financial impact of HHS’ proposed Safe Harbor rule:

“Today’s CBO score shows the serious harm the proposed Safe Harbor rule will do to Medicare Part D and seniors. It’s clear that the only safe harbor this rule provides is to drug manufacturers and their high and rising prices. Meanwhile, this rule will put seniors and taxpayers on the hook for billions in higher spending while failing to lower drug prices.

While HHS assumed in the rule that manufacturers would automatically lower their list prices, CBO does not expect them to do so. Instead, CBO confirmed the CMS actuaries’ estimate that manufacturers will withhold 15% of the amounts they previously negotiated on prescription drugs.

CBO confirmed the rule will raise premiums for millions of seniors in the Medicare Part D program while giving drug manufacturers a multibillion-dollar windfall over the next ten years. It will also vastly increase Medicare and Medicaid’s cost to taxpayers, inflating Medicare Part D spending by $177 billion over the rule’s first ten years. Finally, it will drive costs in the Medicaid program billions of dollars higher than previously forecasted, further straining state budgets.

A diverse array of stakeholders from across the health care system have already spoken up to oppose this rule. Today’s score only reinforces the concerns that the proposed Safe Harbor rule will not achieve its stated goal of lowering drug prices, but instead will raise costs across the system.”