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



Executive Summary

REP. WYDEN "SHORTLY" WILL INTRODUCE BILL TO REVAMP DRUG REBATE provisions enacted in the 1990 Medicaid rebate law, the Oregon Democrat said Jan. 16 at a House Aging Committee/Consumer Interest Subcommittee field hearing on pharmaceutical prices held in conjunction by Rep. Unsoeld (D-Wash.) in Vancouver, Wash. In his prepared opening remarks, Wyden described his upcoming bill as intended to "allow all government programs to earn significant price breaks and ensure that drug companies can no longer penalize private buyers." The bill would consolidate the efforts of all federal agencies that purchase drugs, including Medicaid, Public Health Service clinics, and the Department of Veterans Affairs. Wyden previously has proposed that the V-A might negotiate on behalf of the other agencies ("The Pink Sheet" Oct. 21, p. 3). Wyden's bill would attempt to alleviate the price increases experienced by private buyers, such as hospitals and health maintenance groups, by specifying that any price discounts obtained by these groups would no longer be considered in determining Medicaid discounts. The bill "protects all private simply letting them go out and negotiate the best price they can, regardless of what the government pays," Wyden said at the field hearing. He added that "frustrated private customers with little marketplace clout" might want to "join in" with the government buying group. The West Coast hearing helps lay the groundwork for Wyden's upcoming legislation by providing him with ammunition on pharmaceutical price increases seen by Oregon and Washington hospitals, clinics and other purchasers over the past few years and, more specifically, since enactment of the Medicaid rebate program. For example, Andrew McCulloch, Seattle Harborview Medical Center's chief operating officer, reported that the public hospital's pharmacy budget increased 24% in 1991 and it expected to increase 18% this year. Since the passage of the Medicaid rebate law, McCulloch said, "our ability to aggressively take advantage of volume purchasing has been severely curtailed and our drug costs have increased by approximately $1 mil. by factors unrelated to utilization, changes in technology, or anticipated inflation. Of the 42% increase in our pharmacy budget, we estimated that approximately 10% is attributable to inflation, 15% to increased utilization and changes in technology, and the remaining 17% to price increases associated with [the Medicaid rebate program]."

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




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