HHS Reacts To Court Ruling On Medicaid Reimbursements For Generic Drugs

Armen Hareyan's picture

HHS is seeking to limit the scope of a judge'sdecision last week to temporarily halt Medicaid from implementing a new formulafor drug reimbursements to pharmacies so that it does not alter the way drugmakers calculate rebates to state Medicaid programs, Dow Jonesreports (Wisenberg Brin, Dow Jones, 12/18). U.S. District CourtJudge Royce Lamberth in Washington, D.C., on Friday granted apreliminary injunction that prohibits HHS from adopting a new method forcalculating the average manufacturer price for prescription drugs covered byMedicaid.

The rule would have redefined the AMP for brand-name and generic medications.States use AMPs to calculate Medicaid reimbursement rates for medications.According to CMS, the rule would have saved the federalgovernment and states $8.4 billion over the next five years (Kaiser Daily Health Policy Report, 12/18).

HHS argues that the injunction should not prevent Medicaid from using the newAMP data to calculate rebates that drug makers must pay states for prescriptiondrugs under Medicaid. The agency believes that if manufacturers continue to usethe old method for calculating AMPs, a "significant and costly alterationof the status quo" would result (Dow Jones, 12/18).

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