Biopharmaceutical manufacturers offset the cost of prescriptions through the Medicaid Drug Rebate Program, ensuring access for millions of Americans like children and their parents, pregnant women, the elderly and people living with disabilities who participate in a state Medicaid program.
Why it matters: In federal fiscal year 2021, the $42 billion in discounts manufacturers provided represented 56% of total Medicaid medicine spending in the United States. These savings enabled states and the federal government to reinvest back into the program, better serving the 87 million vulnerable Americans who rely on it.
What's new: Recently released Medicaid state factsheets provide a detailed cost breakdown for how Medicaid spends its budget in all 50 states and the District of Columbia. Here are some examples:
- California received $4.8 billion in rebates from manufacturers, allowing the state to spend a mere 3.7% of their total Medicaid budget on retail prescription medicines.
- Maine’s Medicaid program received manufacturer rebates representing 71% of its total Medicaid retail prescription medicine spending.
- Nebraska spent only 2.7% of its total Medicaid budget on retail prescription medicines because of rebates from manufacturers.
Unfortunately, some states are limiting access to lifesaving brand medicines in Medicaid by imposing barriers on medicines for patients or restricting how many prescriptions patients can fill each month. And at the federal level, CMS has proposed sweeping policy changes to the Medicaid Drug Rebate Program, many of which are not grounded in the Medicaid statute and would go beyond CMS’ legal authority. These policies will lead to poorer health outcomes for already vulnerable populations and contribute to higher costs across the health care system.
Medicaid provides Americans across the country with access to needed medications with low to no cost sharing, improving health equity and access to medicines nationwide. Policymakers should protect that robust access. Read the factsheets and learn more about policy solutions in all 50 states.
Gabby Migliara
Gabby Migliara is a director of Public Affairs at PhRMA focusing on internal communications and PhRMA’s digital presence, including maintaining this website and executive social presence. She previously worked with the U.S. Census Bureau on marketing and communications for the 2020 Census campaign. Outside the office, Gabby enjoys trying new restaurants, hanging with her cat and exploring D.C. neighborhoods.
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Manufacturers provided $42 billion in Medicaid discounts in 2021 alone
Medicaid
Manufacturers provided $42 billion in Medicaid discounts in 2021 alone
Manufacturers provided $42 billion in Medicaid discounts in 2021 alone