Senate bill aims to raise Medicaid rebates

Watch out, pharma. Budget-conscious lawmakers are proposing new cost-savings measures that would hit drugmakers in the pocketbook. Namely, an increase in Medicaid rebates--designed to save $2.1 billion--and a crackdown on pay-to-delay deals. Together, the proposals would theoretically reap $4.4 billion in budget savings.

The most direct hit would be the Medicaid rebates, especially for drugmakers that rely on the government program for a big chunk of their sales. The provision would eliminate an exemption in the healthcare reform bill, adding some drugs to the average manufacturer price fold.

Under healthcare reform, the AMP calculation applies only to payments and rebates involving retail community pharmacies. The new rule would extend the AMP approach to inhalation, infusion and injectable drugs dispensed through PBMs, managed care organizations, HMOs, long-term care providers, and certain other non-pharmacy distributors, The Hill reports.

"This provision is a technical correction [that] modifies a provision in the health reform law [that] was inadvertently drafted in way that excluded these certain types of prescription drugs," a Senate Finance Committee aide tells The Hill.

The political blog contacted PhRMA for reaction, and the trade group said it's "still reviewing the legislation including the Medicaid provision recently introduced." Presumably, if the provision hurts pharma sales, the group's final reaction will be lobbying against it.

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