US health officials have introduced a proposed new rule which they say will save the country $17.7 billion over five years on prescription drugs purchased through the state/federal Medicaid programme.
The rule would implement provisions in the Affordable Care Act (ACA) relating to prescription drug supply through Medicaid - the programme which provides health services for certain US citizens on low incomes - aimed at increasing transparency in pricing and ensuring that taxpayers and states are not overpaying for prescription drugs, according to the Centers for Medicare & Medicare Services (CMS), which has issued the proposed regulation.
The proposed rule seeks to reduce costs through a variety of measures including:
- aligning reimbursement rates to better reflect the actual price which a pharmacy pays for a prescription drug;
- increasing the rebates paid by drug manufacturers which participate in Medicaid; and
- providing rebates for medicines dispensed to people who are enrolled in a Medicaid managed care organisation.
Several US states have implemented similar initiatives aimed at injecting "fairness" into prescription drug pricing, the CMS points out. For example, it says, Alabama estimates that it has made savings of $30 million in one year alone from an initiative which seeks to better understand and align reimbursements with the prices which pharmacies pay for prescription drugs.
Medicaid spent around $26 billion on prescription drugs in 2009, gaining back some $9 billion through rebates. The proposed rule is seeking to increase the minimum rebate supplied by drugmakers for most single-source and innovator multiple-source drugs from 15.1% of the average manufacturer price (AMP) to 23.1%, while for non-innovator generics the minimum rebate would go up from 11% of AMP to 13%.
The Act also seeks to establish a minimum rebate of 17.1% of AMP for certain single-source and innovator multiple-source clotting factors, and also for single-source and innovator multiple-source drugs which have been approved by the Food and Drug Administration (FDA) exclusively for use in children.
The CMS is calling for comment on the proposed rule until April 2, and plans to issue a final version in 2013.