Over 230K US pharma jobs will be lost under proposed mandatory Part D drug rebates, says think tank

US President Barack Obama and some members of Congress have proposed requiring that prescription drug manufacturers pay rebates to the federal government for drugs dispensed to Medicaid/Medicare dual-eligible beneficiaries and other low-income seniors through the Medicare Part D program.

The required rebates would be in addition to the manufacturer-paid rebates already in the Part D program due to the market-based negotiations between manufacturers and Part D plans, points out a new report from the independent think-tank American Action Forum, which is led by former Congressional Budget Office Director Douglas Holtz-Eakin.

The Office of Management and Budget estimates that the President’s proposal will reduce federal outlays by $135 billion over 10 years. However, the reduced revenue is likely to substantially affect the pharmaceutical industry, and the OMB did not provide any estimates of the effect on jobs - somewhat ironic in that the President’s proposal came in the context of his “jobs bill,” says the AAF.