Pink Sheet is part of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

This copy is for your personal, non-commercial use. For high-quality copies or electronic reprints for distribution to colleagues or customers, please call +44 (0) 20 3377 3183

Printed By

UsernamePublicRestriction
UsernamePublicRestriction

V-A DRUG DISCOUNT EXEMPTION FROM MEDICAID REBATE CALCULATIONS

Executive Summary

V-A DRUG DISCOUNT EXEMPTION FROM MEDICAID REBATE CALCULATIONS is contained in the Veterans Affairs Department FY 1992 appropriations bill awaiting presidential review. The bill (HR 2519) was adopted by Congress Oct. 2. It includes a provision originally offered by Sen. Mikulski (D-Md.) to exempt pharmaceutical price discounts offered to V-A facilities from best price calculations under the Medicaid prescription drug price rebate law. The exemption would extend through June 1992. The legislation also requires V-A to attempt to negotiate with manufacturers to obtain new low prices for the department. The exemption and negotiation requirement are substantive policy provisions not usually found in appropriations measures but more often handled by congressional committees with jurisdiction for legislative authority. Consequently, the legislators whose committees are responsible for Medicaid legislation, Senate Finance Committee Chairman Bentsen (D-Texas) and House Energy & Commerce Committee Chairman Dingell (D-Mich.), reportedly were concerned that the discount provision in HR 2519 constituted an infringement on their legislative jurisdiction by the Appropriations Committees of both chambers. The Pharmaceutical Manufacturers Association supports the approach of HR 2519 to restoring low prices for V-A hospitals because it would not require companies to offer deep discounts to the much larger Medicaid market. Consequently, PMA has taken the unusual step of urging its member firms to consider reducing their prices for V-A customers in accordance with the appropriations measure. In an Oct. 3 letter to board members, PMA Chairman John Stafford (American Home Products chairman and CEO) and President Gerald Mossinghoff called HR 2519 "far less intrusive in company decisionmaking -- and far more consistent with the preservation of a free market for the drug industry -- than previous proposals." The letter urges member firms "to cooperate fully" in V-A negotiations toward new low prices for its health care facilities. The letter notes that the more "intrusive" legislative proposals for restoring drug price discounts for hospitals include legislation by House Veterans Affairs Committee Chairman Montgomery (D-Miss.). That bill "would mandate that each manufacturer 'roll back' its prices to their Sept. 1, 1990 level, to be increased only by the inflation factor of the medical care account" of the V-A, PMA noted ("The Pink Sheet" Oct. 7, T&G-5). Sen. Pryor (D-Ark.) is considering legislation to lead to price rollbacks to 1990 levels for all hospitals and HMOs in such a way that deep discounts also would be required for the Medicaid program ("The Pink Sheet" Sept. 30, p. 3). "In view of the continuing threat of such intrusive legislation, and of the fact that the Mikulski amendment will be in effect only until June 1992 or until the enactment of other legislation concerning the price of drugs and biologicals paid for by the V-A, we urge PMA member companies to cooperate fully with the secretary of Veterans Affairs in the negotiations called for by the Mikulski amendment," the letter states. PMA then sounded a variation on its usual disclaimer that it cannot influence members' pricing policies: "Prices offered by the individual companies in the course of these negotiations must, of course, be determined individually by each manufacturer."

You may also be interested in...



Part D Discount Liability Coming Into Focus: CMS Releases Drug Cost Data

Newly released Medicare Part D data sheds light on the sales hit that branded pharmaceutical manufacturers will face when the coverage gap discount program gets under way in 2011

FDA Skin Infections Guidance Spurs Debate On Endpoint Relevance

FDA appears headed for a showdown with clinicians and the pharmaceutical industry over the proposed new clinical trial endpoints for acute bacterial skin and skin structure infections, the guidance's approach for justifying a non-inferiority margin and proposed changes in the types of patients that should be enrolled in trials

Shire Hopes To Sow Future Deals With $50M Venture Fund

Specialty drug maker Shire has quietly begun scouting deals with a brand-new $50 million venture fund, the latest of several in-house investment arms to launch with their parent company's pipelines, not profits, as the measure of their worth

UsernamePublicRestriction

Register

ID007083

Ask The Analyst

Ask the Analyst is free for subscribers.  Submit your question and one of our analysts will be in touch.

Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts

Cancel