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WASHINGTON — Drug makers dodged more than $1.3 billion in Medicaid drug rebates between 2012 and 2016 because they inappropriately or mistakenly miscategorized brand-name products as generics, which qualify for lower rebates.

Some $1.17 billion of that figure was associated with miscategorizations for just two drugs, according to a new report from the Health and Human Services Department’s independent inspector general, which did not name the products or their manufacturers. Had the 10 most expensive of the drugs been classified appropriately, state Medicaid programs would have saved that $1.3 billion figure, the report said. Instead, they collected just $199 million for those drug rebates.


Under the drug rebate program, manufacturers pay a certain rebate to state Medicaid programs in exchange for coverage of their drugs. That amount depends on how those drugs are classified.

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