Affordable Care Act (Obamacare) Saves $17.7 Billion on Prescription Drugs for States
CMS issues new rule to cut costs, increase transparency in Medicaid drug pricing to save taxpayers money
Jan. 31, 2012 - Provisions in the health care reform law, the Affordable Care Act (often called “Obamacare” by
Republicans), will save taxpayers and States an estimated $17.7 billion over five years on prescription drugs bought through Medicaid,
according to estimates in a proposed rule issued today by the Centers for Medicare & Medicaid Services (CMS).
Today’s announcement, implementing the Medicaid prescription drug provisions of the Affordable Care Act, will increase
transparency in drug pricing and ensure taxpayers and States are not overpaying for prescription drugs.
“Thanks to the Affordable Care Act, we will save taxpayers billions of dollars each year on prescription drugs in
Medicaid,” said CMS Acting Administrator Marilyn Tavenner. “Today's announcement puts in place simple measures that will cut costs, increase
transparency and benefit consumers.”
The proposed regulation reduces costs through a number of improvements, including:
● Aligning reimbursement rates to better reflect the actual price the pharmacy pays for the drug;
● Increasing rebates paid by drug manufacturers that participate in Medicaid, and;
● Providing rebates for drugs dispensed to individuals enrolled in a Medicaid managed care organization.
Several States have implemented similar initiatives to inject fairness into prescription drug pricing. Alabama, for
example, estimates a savings of $30 million in one year alone from an initiative to better understand and align reimbursements with the prices
pharmacies pay for prescription drugs.
In 2009, Medicaid spent $15.8 billion on prescription drugs. This proposed rule will implement initiatives designed to
save the program $17.7 billion over five years.
The Proposed Rule will publish in the Federal Register on February 2, 2012 at which time it can be viewed here –
http://www.gpoaccess.gov/fr/. The comment period will close on April 2, 2012.
Stakeholders will have 60 days from the publication date to submit public comments. CMS plans to issue a final rule in
2013.
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