Budget Reconciliation Bill Will Yield Savings From Medicaid Prescription Drug Reform
This article was originally published in The Pink Sheet Daily
Executive Summary
The Deficit Reduction Act of 2005 projects $4.76 bil. in savings from Medicaid between 2006 and 2010, including $3.86 bil. from prescription drug payment reform.
|
The budget reconciliation bill approved by the House Dec. 19 is projected to yield over $11 bil. in savings from Medicare and Medicaid between 2006 and 2010. The Deficit Reduction Act of 2005 (S. 1932), which passed the House Dec. 19 in a 212-206 vote, is predicted to yield $3.86 bil. in savings from Medicaid prescription drug payments between 2006 and 2010. The Senate is expected to take up the legislation this week. Overall, the bill projects $4.76 bil. in savings from Medicaid and $6.4 bil. in savings from Medicare for the same time frame. The bill would establish an upper payment limit for the Medicaid program for multiple-source drugs at 250% of the average manufacturer price. It would also require states to collect Medicaid rebates on physician-administered drugs. The bill would provide for the inclusion of authorized generics in Medicaid AMP calculations. The Senate Finance Committee proposed including authorized generics in "best price" calculations in its budget reconciliation package (1 (Also see "Senate Finance Committee Proposes Including “Authorized” Generics In “Best Price”" - Pink Sheet, 20 Oct, 2005.)). The HHS Inspector General has said it will initiate a study in fiscal 2006 to examine the effect of authorized generics on Medicaid drug pricing and rebates. The two original versions of the bill, each passed in November, had stark differences. The Senate version included changes to the manufacturer rebate structure, while the House bill included cost-sharing provisions (2 (Also see "House Passes Medicaid Reform, Includes GAO Study On Pharmacy Reimbursement" - Pink Sheet, 18 Nov, 2005.)). -Brian Marson |