A recent report published by the Office of the Inspector General showed the Medicaid program pays significantly less than Medicare for drugs.
The OIG compared the prices paid (including rebates) for 200 covered Part D drugs by Part D plan sponsors to the prices paid (including rebates) for the same drugs by state plans under Medicaid. The OIG also assessed the impact of price differences. Results from the agency's analysis showed the following:
• In 2009, pharmacy reimbursement amounts under Medicare Part D and Medicaid were similar for most selected brand-name drugs but differed substantially for over half of selected generic drugs.
• In 2009, Medicaid unit rebate amounts for brand-name drugs were substantially higher than Part D unit rebate amounts; rebates for generic drugs under both programs were negligible.
• After accounting for rebates, Medicaid net costs for selected brand-name drugs were much lower than Part D net costs.
• As a result, Medicaid collected nearly two-thirds as much as Part D in rebates for the 100 brand-name drugs ($2.9 billion vs. $4.5 billion), despite having only about one-fourth of the expenditure ($6.4 billion vs. $24 billion).
Read the OIG report about Medicare and Medicaid costs for drugs (pdf).
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The OIG compared the prices paid (including rebates) for 200 covered Part D drugs by Part D plan sponsors to the prices paid (including rebates) for the same drugs by state plans under Medicaid. The OIG also assessed the impact of price differences. Results from the agency's analysis showed the following:
• In 2009, pharmacy reimbursement amounts under Medicare Part D and Medicaid were similar for most selected brand-name drugs but differed substantially for over half of selected generic drugs.
• In 2009, Medicaid unit rebate amounts for brand-name drugs were substantially higher than Part D unit rebate amounts; rebates for generic drugs under both programs were negligible.
• After accounting for rebates, Medicaid net costs for selected brand-name drugs were much lower than Part D net costs.
• As a result, Medicaid collected nearly two-thirds as much as Part D in rebates for the 100 brand-name drugs ($2.9 billion vs. $4.5 billion), despite having only about one-fourth of the expenditure ($6.4 billion vs. $24 billion).
Read the OIG report about Medicare and Medicaid costs for drugs (pdf).
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