How Does the Trump Administration Drug Pricing Blueprint Affect Medicaid?

Issue Brief
  1. “Public Opinion on Prescription Drugs and Their Prices,” Kaiser Family Foundation, https://www.kff.org/slideshow/public-opinion-on-prescription-drugs-and-their-prices/.

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  2. K Young and R Garfield, Snapshots of Recent State Initiatives in Medicaid Prescription Drug Cost Control, Kaiser Family Foundation, February 2018, https://www.kff.org/medicaid/issue-brief/snapshots-of-recent-state-initiatives-in-medicaid-prescription-drug-cost-control/.

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  3. Secretary Azar presented this position in his comments at the White House Press Briefing Friday, May 11th, 2018.

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  4. 42 U.S.C. 1396r-8(c)

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  5. FY 2019 HHS Budget in Brief, “Putting America’s Health First, FY 2019 President’s Budget for HHS,” https://www.hhs.gov/sites/default/files/fy-2019-budget-in-brief.pdf.

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  6. In August 2017, Mylan settled with the Department of Justice to resolve claims that they had intentionally classified the EpiPen product incorrectly as a generic drug to pay less money in rebates to Medicaid. See “Mylan Agrees to Pay $465 Million to Resolve False Claims Act Liability for Underpaying EpiPen Rebates,” Department of Justice, August 17, 2017, https://www.justice.gov/opa/pr/mylan-agrees-pay-465-million-resolve-false-claims-act-liability-underpaying-epipen-rebates. Additionally, a 2017 OIG report found that Medicaid lost over a billion dollars in rebates between 2012 and 2016 due to misclassification of drugs. See “Potential Misclassifications Reported by Drug Manufacturers May Have Led to $1 Billion in Lost Medicaid Rebates,” HHS, Office of Inspector General, December 2017, https://oig.hhs.gov/oei/reports/oei-03-17-00100.pdf.

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  7. For more information on formularies in Medicaid, see Young and Garfield, op. cit.

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  8. The Blueprint strongly favors value-based pricing, at one point saying “[v]alue-based transformation of our entire healthcare system is a top HHS priority.”  Value-based pricing is a popular idea, and one that requires reconciling with the best price aspect of the MDRP.

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  9. On May 15th 2018, CMS unveiled its “enhanced drug dashboard.”

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