The Trump administration has dropped one of the meatiest portions of its plan to reduce drug prices.

The Department of Health and Human Services said it will no longer pursue a rule that would have prohibited the payment of certain rebates on drugs in Medicare Part D and Medicaid plans.

The idea was to target the middlemen, pharmacy benefit managers, whose negotiations with drugmakers and insurers influence the costs consumers pay for drugs.

The hope was the rule would have effectively pressured drugmakers to give discounts to consumers instead of middlemen, HHS secretary Alex Azar said in remarks to the media in February. “Passing discounts directly on to the patient will move us toward a real market for drugs,” said Azar. “We’re going to fundamentally rewire how we pay for drugs in this system.”

Right now, if you’re a Medicare Part D beneficiary, and you need to pick up a drug that has a $120 list price, you might have to pay that full price, even if the middleman that negotiates on behalf of your insurer only pays a net price of $100 for it, after rebates. The idea of this proposal was that the consumer would only have to pay the discounted price.

When the rule was first announced, drugmakers supported the idea, and some drug pricing experts said it could be an effective move. “This is a huge potential change, transformative,” Dr. Walid Gellad, director of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh told NPR.

But some critics were concerned that the move wouldn’t address drugs’ list prices that are the starting point for negotiations.

Also, there was a worry that the elimination of rebates could ultimately cost seniors more, in higher premiums on their Medicare plans. The nonpartisan Congressional Budget Office in May determined the plan would cost the federal government $177 billion over nine years, largely from increases in the government’s share in the cost of premiums.

In a briefing with reporters Thursday, Azar said the administration scrapped the plan after getting feedback from the public and stakeholders. “At the end of the day, while we support the concept of getting rid of rebates, while we appreciate and are passionate about the problems and the distortions in the system caused by this opaque rebate system, we’re not going to put seniors at risk of their premiums going up.”

“Congress perhaps might even take this up — they have more tools than we do,” Azar said. “They can actually look more holistically at changes to the system that could also mitigate or protect seniors from bearing any impact of change. I don’t have those tools; they might have those tools.”

A senior Trump administration official, who spoke on background during a separate briefing Thursday, echoed those sentiments, saying their primary focus is to support a legislative deal to lower drug prices and that there was concern this change would disrupt those efforts.

Drugmakers were in favor of trying to bring consumer prices down by targeting middlemen. The drug industry trade group PhRMA called the rollback of the plan “a blow to seniors who could have paid less for their medicines at the pharmacy counter.”

“Of all the policies proposed in Washington right now, this was the only proposal that would provide immediate savings at the pharmacy counter, instead of only saving the government or insurance companies money,” said Holly Campbell, PhRMA’s deputy vice president of public affairs in a statement.

Other stakeholders cheered the administration’s reversal of the proposed rule, including groups representing private insurers, public sector health plans and pharmacy benefit managers. They pointed to the prices set by drugmakers as a better focus for efforts to reduce drug costs.

“Any solution should start with addressing drug prices,” T.J. Crawford, a spokesman for CVS Health, which operates a large pharmacy benefit manager, wrote to NPR.

Matt Eyles, president and CEO of America’s Health Insurance Plans, said in a statement: “As we all know, drug prices and price increases are set and controlled solely by drugmakers. They alone could decide to reduce prices – and can do so today.”

The rebate reversal is the second defeat for the administration on drug pricing in a week, coming just days after a court struck down another pillar of its drug pricing plans, a proposed regulation to require that drug companies disclose prices in ads.

Azar says the administration hasn’t given up on lowering drug prices. But Congress will have to play a bigger role. “We have many other things that we’re doing in drug pricing,” he says. “We are working on a bipartisan basis with Congress on drug pricing legislation.”

The White House official who briefed reporters Thursday said people in the administration don’t plan to “twiddle our thumbs” while the legislative process plays out, and are working on a number of plans.

President Trump hinted at one idea last week — a “most favored nation” clause that would tie American drug prices to what other countries pay. The administration has not released any details about how that would work or when it would roll out.

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For years, Beatriz Basurto’s family has had to make hard choices about when to pay for medical care, and who should get treatment.

“To me, it was always the doctor would be the last resort,” she says. “But for my parents, the doctor was never a choice. No matter how sick they got, they had to suck it up.”

Basurto, 19, says her parents always put the kids’ medical needs before their own. The family moved to California from Mexico more than 15 years ago. During that time, most of her family members have been ineligible for Medi-Cal, the state’s version of Medicaid, because they aren’t citizens.

Their situation started to change in 2016, when California expanded the program to all low-income children 18 and under, regardless of immigration status. That opened the doors for Basurto’s little sister to enroll.

And starting in January of 2020, Beatriz will be allowed to sign up, too.

California’s governor signed a law Tuesday that approved $98 million to expand Medi-Cal to income-eligible undocumented adults from age 19 until they turn 26, making it the first state in the United States to cover this group. California estimates 138,000 young adults will become insured under the new policy.

While the state has expanded options for children and young adults, most undocumented people in California still have limited access to health care. They can sign up for “restricted” Medi-Cal, but it only covers emergencies and pregnancy-related care. Many people on this plan end up putting off treatment or turning to county clinics for help.

Supporters who want to further expand Medi-Cal to all residents say that move would boost public health and bring down emergency room costs. California Gov. Gavin Newsom has vowed to make everyone eligible.

“We believe in universal health care,” he said during a speech this month. “Universal health care’s a right, and we’re delivering it — regardless of immigration status — to everyone up to the age of 26, and we’re gonna get the rest of that done, mark my words.”

But after months of debate at the California State Capitol, proposals to offer Medi-Cal to all undocumented adults, as well as a push to cover undocumented seniors, were deemed too costly.

Medicaid is a joint state-federal program, but California would use state dollars to pay for expanded benefits to immigrants living in the U.S. without legal permission.

Some lawmakers argued California should be spending health care dollars on its own citizens, rather than people who are not living in the state legally.

“We are going to be a magnet that is going to further attract people to a state of California that’s willing to write a blank check to anyone that wants to come here,” said state Sen. Jeff Stone, a Republican, at a recent legislative hearing.

President Donald Trump also criticized California for offering health insurance to undocumented people.

“They don’t treat their people as well as they treat illegal immigrants,” the Republican president told reporters in the White House on Monday. “It’s very unfair to our citizens and we’re going to stop it, but we may need an election to stop it.”

But advocates say California isn’t done fighting for Medicaid expansion.

Almas Sayeed, deputy director of the California Immigrant Policy Center, says providing health care is crucial, given federal anti-immigrant hostility.

“For young immigrants, it’s a moment of feeling like we don’t belong in this country,” she says. “We work really hard in California to make sure communities know that they do.”

Beatriz Basurto is eager to sign up for Medi-Cal this January. She attends community college near Los Angeles, and wants to become an environmental scientist. She hopes getting insurance will allow her to seek out mental health care for ongoing stress, some of which she attributes to hostile political rhetoric about immigrants.

“The world isn’t always so welcoming,” she says. “It can be really, really overwhelming. It exhausts you mentally. It’s almost like I have no time to feel anything, because there’s always something else I have to do.”

Brenda Huerta, an undocumented 22-year-old, was enrolled in a health plan through her university. But that coverage expired this summer, after she graduated. She says her college plan was great for checkups, but didn’t cover large expenses.

When Huerta broke her leg she ended up paying for her care out-of-pocket. And she’s still helping pay off hospital bills from when her mom had major surgery.

Huerta needs new glasses, and she wants to continue regular medical and dental care. But she isn’t sure if she’ll sign up for Medi-Cal next year. Even with coverage, she’s worried her costs will stack up.

“Paying the [student] loans that I have, I haven’t really been thinking about health insurance,” she says.

She and other young adults recently met with Gov. Gavin Newsom to lobby for the expansion of Medicaid eligibility to all Californians.

“Everyone in the room, we did talk about our struggles as undocumented people not having health insurance,” she says. “And we also mentioned how our parents suffer from not having health insurance, because it puts an economic burden on us.”

Newsom’s office estimated expanding eligibility to all undocumented adults would cost $3.4 billion. About two thirds of California’s roughly 2.2 million undocumented immigrants would qualify for Medi-Cal based on income guidelines.

Basurto says even though coverage for undocumented young adults is a small step in the larger battle for equal rights, it makes her feel more at home in the U.S.

“I do belong here,” she says, “regardless of what others say.”

This story is part of NPR’s health reporting collaboration with Capital Public Radio and Kaiser Health News.

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Top officials from 13 states are joining Philadelphia in urging a federal court to allow a site to open where people can inject illegal opioids under medical supervision, the latest escalation in a legal battle with the Justice Department that may determine whether such facilities, known as supervised injection sites, can start to operate in America.

In Philadelphia, where drug overdoses — most involving opioids — kill three times as many people as homicides, a nonprofit called Safehouse has been working to launch an injection site as a way of combating the city’s opioid crisis.

But the Justice Department has mounted a legal challenge to block it before it opens, claiming such a site violates federal drug laws and would enable drug use.

A friend-of-the-court brief submitted Wednesday by leaders from five cities — Ithaca, New York City, Pittsburgh, San Francisco and Seattle — says injection sites, widely used in parts of Canada and Europe, need to be part of the way cities respond to the opioid crisis.

“The opioid crisis has taken a major toll on American cities and counties, including ours,” the city leaders wrote. “Despite our efforts, the existing methods of combating the opioid crisis have proven to be too little, or at least too late, for far too many of our residents.”

In a separate brief, attorneys general from Washington, D.C., and seven states including Michigan, New Mexico and Oregon also urged the court to allow the injection site to open. “As laboratories of experimentation and the primary regulators of public health, States should be free to adopt cutting-edge medical interventions,” the top state law enforcement officials wrote. The other top state law enforcement officials who signed on to the brief are from Delaware, Minnesota, Virginia and Colorado.

The opioid crisis has also resulted in an alarming death rate in the cities that are exploring injection sites like the one Philadelphia is pursuing.

In New York City alone, more than 1,000 people die every year from overdoses. “That means more New Yorkers die of opioid overdoses than from homicides, suicides and vehicle crashes combined,” the city leaders’ brief notes.

But legal uncertainty and other issues have slowed the efforts to open supervised injection sites. However, city leaders say they believe no other option is able to put a significant dent in lethal overdoses.

“These trends have continued despite extensive efforts by local governments and health departments to curb the crisis, including policies to expand medication-assisted treatment, clean needle exchanges, and the distribution of naloxone to first responders and public health workers,” the city officials wrote.

Justice Department officials have stated that the idea of a supervised injection site violates so-called crack house laws that make it a crime to own a property where drugs are being used, but Safehouse planners and an alliance of local leaders counter that statutes from the 1980s were never intended to apply to what they view as a medical facility in the midst of a public health crisis.

The city leaders write that the sites “would be places where drug users can obtain medical supervision and treatment. The act of allowing drug users to [inject drugs] in a supervised environment where they can be rescued if needed, rather than on the street or in a restroom stall.”

A barrage of other briefs were also filed to the federal court in Philadelphia on Wednesday both in support of and opposing the proposed site. Among them, one written by a group of 64 current and former law enforcement officials, including former Justice Department officials, claiming that federal prosecutors were “distorting federal drug laws” in trying to shut down the country’s first attempt at opening a supervised injection site.

But a group of six neighborhood associations around the Philadelphia neighborhood of Kensington, the heart of the city’s opioid crisis and the preferred location of the injection site, wrote a brief pleading with the court to not allow the site in their community, fearing such a facility would invite additional crime and drug trafficking.

“Law abiding citizens walking to and from work and young children traveling to school face the risk of getting caught in the violence and become targets for the dealers looking to increase their customer base,” wrote the neighborhood group, which filed the brief along with the city’s Fraternal Order of Police.

“The police, who are experts in this area, know what Congress knew. They know from bitter experiences that concentrating drug use in a place like the one that Safehouse proposes will bring more addicts, more dealers and more violent crime to neighborhoods that are already suffering,” the brief says.

Yet, the brief from the states’ attorneys generals argues that studies have shown that injection sites have proved to save lives in other countries, and that it is time for the U.S. to give the controversial measure a chance.

“States that are home to metropolitan areas should be free to experiment with this potentially lifesaving intervention, as well as others, without fear that public health nonprofits or doctors in their jurisdictions will be subject to prosecution,” the group wrote.

The case is pending in Philadelphia before U.S. District Judge Gerald A. McHugh, who will rule sometime after a July 22 filing deadline.

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Updated 6:30 p.m.

The Trump administration has announced an ambitious plan to change treatment for kidney disease in the United States.

President Trump signed an executive order Wednesday directing the Department of Health and Human Services to develop policies addressing three goals: reducing the number of patients developing kidney failure, reducing how many Americans get dialysis treatment at dialysis centers and making more kidneys available for transplant.

“With today’s action, we’re making crucial progress on another core national priority: the fight against kidney disease,” Trump said at a speech prior to signing the order.

Kidney disease is the ninth-leading cause of death in the U.S. and a major expense for the federal government. Medicare pays for end-stage renal disease treatment, including dialysis and kidney transplant.

“Taxpayers spend more on kidney disease — over $110 billion — than we do on the National Institutes of Health, the Department of Homeland Security and NASA combined,” Joe Grogan, head of the White House’s Domestic Policy Council told reporters.

The executive order pushes for changes in three areas: prevention, dialysis care and kidney donation. To implement parts of the order, the Centers for Medicare and Medicaid Services announced Wednesday five proposed payment models intended to increase innovation in the delivery of kidney care.

Better prevention of kidney failure is desperately needed, according to Dr. Holly Mattix-Kramer, a kidney specialist at Loyola University Chicago and the president of the National Kidney Foundation. Mattix-Kramer was among dozens of kidney specialists and patient advocates who attended the announcement Wednesday.

“We’re extremely excited,” she says. “For so long we felt like no one was paying attention to this epidemic of kidney disease.”

One problem, she explains, is that there hasn’t been financial incentive to get doctors to screen for kidney disease or to diagnose and educate patients about it. “Once you get kidney failure then there’s a payment structure for that,” she says. “But there lacked a good payment structure incentive for preventing kidney failure, which seems not intuitive and seems obviously something that we should fix.”

The executive order proposes to change the way Medicare providers are paid to motivate them to focus on patient education and preventing the progression of kidney disease. It also calls for an awareness campaign. “Forty percent of Americans with some stage of kidney disease do not know they have it,” Health and Human Services secretary Alex Azar told reporters on a call Wednesday morning.

A key focus of the executive order is effort to encourage in-home dialysis. One of the new, proposed CMS models incentivizes clinicians to offer this option to patients.

Currently, most dialysis is delivered at dialysis centers, a multibillion-dollar industry dominated by two for-profit companies. In-center dialysis can be time-consuming and burdensome for patients.

“Currently only 12% of American dialysis patients receive it at home. That would compare to 56% in Guatemala and 85% in Hong Kong,” said Azar. “We want to get to 80% of those who are under treatment either in-home dialysis or transplanted eventually — so a radical change from where we stand now.”

CMS Administrator Seema Verma explained that the current system prioritizes payment to in-center dialysis, but her agency wants to start to incentivize in-home dialysis and transplants.

“The way we currently pay for chronic kidney disease and kidney failure isn’t working well for patients,” said Verma in a statement.

Mattix-Kramer says the administration’s targets for increasing the proportion of patients getting dialysis at home may be overly ambitious. “It’s great to have big goals like that, but I do think 80% is going to be incredibly difficult,” she says.

For a lot of her patients, it wouldn’t be easy to switch to in-home treatment. “You need social support and you need a clean house and you need someplace to have equipment. Many of our patients live in areas where they don’t even have a grocery store in their neighborhood,” she says. “A lot of those socioeconomic issues would need to be addressed.”

Another focus of the executive order is the organ transplant system. Currently, close to 100,000 people are on a waiting list for kidneys.

“Many, many people are dying while they wait,” Trump said, addressing a room full of kidney doctors, advocates and patients in Washington, D.C., just before signing the executive order. “We’ll do everything we can to increase the supply … of the available kidneys and getting Americans off these waitlists.”

Azar said he believes it’s possible to double the number of kidneys available for transplant by 2030. “There is currently a lack of accountability and wide variability among these organ procurement organizations,” he said. “The executive order will demand a much higher level of accountability.” He also said living donors could receive compensation from the government for lost wages and child care.

Finally, the executive order encourages research and development of an artificial kidney, an innovation that could someday replace the need for transplants.

Administration officials touted Wednesday’s news as the first major action related to kidney disease in decades. Previous administrations, including Barack Obama’s, have suggested similar initiatives, but not much has changed.

Andy Slavitt, who ran the Centers for Medicare and Medicaid Services under President Obama, praised Wednesday’s announcement on Twitter. “Care of kidney patients has been broken in the US for a long time, plagued with a corporate duopoly [and] a lower income minority population losing out,” he wrote.

But he also pointed out that as the Trump administration makes this announcement, it is arguing in court that the Affordable Care Act should be struck down as unconstitutional. “There is one law that makes this new change possible. The same law that requires people with [preexisting] conditions get coverage. The ACA,” he tweeted. “Without it, there is no authority to do this.”

It was unclear how quickly these changes could roll out. Frequently, Trump’s executive orders instruct agencies to develop federal rules, a lengthy bureaucratic process. One more immediate change is in how Medicare providers are reimbursed; CMS announced that its proposed payment models would roll out starting in January 2020.

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