New cost-cutting Medicaid rule could save US billions

A newly proposed cost-cutting rule implemented into the US Medicaid programme could save the country up to $17.7bn over five years, say US health officials. The proposed rule on prescription drugs purchased through the state / federal programme is aimed at increasing the transparency in the pricing of prescription drugs, ensuring that both taxpayers and states are not overcharged.

The provisions, issued by the Centers for Medicare and Medicare Services, will be implemented into the Affordable Care Act. Costs would be reduced by increasing rebates paid by drug manufactures participating in the Medicaid programme, providing rebates for medicines earmarked for patients enrolled in a Medicaid managed care organisation and aligning the amount of reimbursement to coincide with the actual price a pharmacy pays for prescription drugs.

Under the new rule, the minimum rebate supplied by pharmaceutical companies for single-source and innovator multiple-source drugs from the current 15.1% of average manufacturer prices to 23.1%, while non-innovator generics will witness a 2% increase to 13%. A minimum rebate from specific single-course and innovator multiple-source clotting factors will also be established, set at 17.1% of the average manufacturer price. Centers for Medicare and Medicare Services plans to issue a final version of the act in 2013, and has set a final date of 2 April 2011, for comment on the proposed revisions.