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July 18, 2019

The Trump administration announced it will not pursue its proposal to eliminate prescription drug rebates from government-facilitated health plans. While once touted as a critical step in lowering the list prices of prescription drugs, the administration cited research and analysis to explain that the proposal may fail to address drug prices.

The proposal was intended to support the pharmaceutical industry but impede insurers and PBMs. Wall Street measured industry reactions to the death of the plan. Major health insurers UnitedHealth and Cigna saw a 6% and 9% gain in shares, respectively. The administration’s move brings up questions about the direction of its drug pricing strategy and leaves the door open for critics to obstruct other White House proposals, like the international pricing benchmark.