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WASHINGTON — House Democrats are expected to insert a controversial Medicaid drug pricing policy into a fast-moving Covid-19 relief bill, several health care lobbyists and a congressional aide briefed on the package told STAT.

The policy aims to help states recoup some of the costs they incur in their Medicaid programs when drug makers hike the prices of certain drugs. Right now, federal law caps how much states can collect. Congress’ new policy would rescind that so-called “Medicaid rebate cap.”


The policy will have the biggest impact on drugs like insulin, which have seen massive price hikes and for which drug makers also give big discounts to private insurers. The policy could allow states to demand such deep discounts, in some cases, that drug makers would actually end up owing states money every time a Medicaid beneficiary fills a prescription.

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  • I am a little confused by the math used in the “example” in the story – are you saying that they can base a demanded discount to the Medicaid price based on what is happening over in the private insurance pricing for the same drug, and demand a rebate equal to the commercial rebate in $ which actually exceeds the contracted Medicaid price? The key to fixing the problem for our entire society (not just government plans) is to outlaw rebates and require all payer pricing for Rx from the original manufacturers with value added transparency between that price and the ultimate purchaser. But, thanks for this insight on the bill!

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