The Trump administration will not move forward with a proposed rule to eliminate Medicare rebates to pharmacy benefit managers—a decision the association representing the industry said will allow lawmakers to work on "real solutions" to lowering prescription drug prices.

PBMs are "middlemen" who negotiate drug prices with pharmaceutical companies on behalf of private insurers and other parties. Drug makers blame rebates paid to PBMs for the rising costs of medications while PBMs say manufacturers are to blame. The Trump administration had proposed ending rebates paid to PBMs through Medicare as a way to drive down drug prices. However, White House officials backed down because of the potential cost to the government of doing so and worries the rule would drive up premiums, The Washington Post reported.

The decision is a blow for Pharmaceutical Research and Manufacturers of America, which had advocated for the rule. The group did not issue an immediate response but in a January statement CEO Stephen Ubl said the proposal would "help to fix the misaligned incentives in the system that currently result in insurers and pharmacy benefit managers (PBMs) favoring medicines with high list prices."

The Pharmaceutical Care Management Association, which represents PBMs, welcomed the decision to kill the rule. In a statement, CEO JC Scott said, "only drug manufacturers have the power to set drug prices." He also urged federal lawmakers to "deliver real solutions so that those that need it the most have access to affordable prescription drugs."

"We understand that high prescription drug prices are a burden for too many Americans," Scott said. "There is still a problem of affordability for consumers that must be addressed, and PBMs look forward to working with policymakers to advance solutions."