As we near the end of Medicaid Awareness Month, we wanted to acknowledge that Medicaid is one of the nation’s most important safety-net programs. This federal-state partnership provides health care coverage to more than 80 million individuals. What many don’t know is that biopharmaceutical manufacturers play a critical role in helping state Medicaid programs provide affordable access to medicines under the Medicaid Drug Rebate program (MDRP).
While the federal government provides general guidelines, each state designs their own Medicaid program and decides whether to provide prescription drug coverage. To help states provide robust access to medicines, manufacturers enter into a national rebate agreement with the Secretary of HHS (on behalf of states). Under the agreement, states agree to provide access to all of a manufacturer’s medicines and in exchange, manufacturers provide significant rebates based on Medicaid drug utilization. The goal of the MDRP was to ensure Medicaid received a price at least as low as the price given to a manufacturer’s “most favored customer,” thus helping keep costs down for state governments and patients. Today the system is still working.
All states offer prescription drug coverage today, and Medicaid spending on medicines remains low. In 2022, retail prescription drugs made up just 5.6% of all Medicaid spending. This is largely due to the $48.5 billion in rebates manufacturers provided — a 39% increase from 2017.
Due in part to the rebates provided by biopharmaceutical companies, Medicaid enrollees access medicines that they might not otherwise be able to, meaning that patients are less likely to avoid getting the care they need. And because Medicaid primarily focuses on individuals with low incomes, there are low or no copays. Without the program, many enrollees could not afford their lifechanging medicines.
The industry is committed to delivering new, innovative medicines and working with policymakers to ensure they are accessible and affordable for patients through programs like Medicaid.
Nicole Longo
Nicole Longo is Deputy Vice President of public affairs at PhRMA focusing on Medicare, 340B, importation and more. She previously worked for a D.C.-based public affairs firm where she assisted a wide range of clients with communications efforts on everything from trade policy to agriculture policy to health care policy. Outside the office, Nicole can be found trying new restaurants (usually Italian), taking an occasional barre class and cheering on the Cincinnati Bengals.
Nicole Longo
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Providing affordable access to medicines in Medicaid
Providing affordable access to medicines in Medicaid