Press Release

PhRMA Statement on New CMS Medicaid Guidance

Washington, D.C. (January 30, 2020) — Pharmaceutical Research and Manufacturers of America (PhRMA) president and CEO Stephen J. Ubl issued the following statement in response to the new Medicaid guidance issued today by the Centers for Medicare and Medicaid Services (CMS):
“We strongly oppose CMS’s new guidance to exclude drugs covered under the Medicaid program for certain populations, devastating access to lifesaving medicines for the country’s most vulnerable people. Medicaid patients frequently have chronic health conditions that often require access to a broad range of medicines. This policy jeopardizes that access and subsequently the health of millions of Americans. 
“This CMS guidance is a complete and arbitrary reversal of the agency’s Massachusetts waiver decision 18 months ago and flies in the face of clear statutory requirements and contractual obligations. It violates federal law and the Medicaid statute by allowing the use of closed formularies while maintaining statutorily mandated rebates on drugs in the Medicaid program.” 

Additional Information:
Under the Medicaid Drug Rebate program, the Secretary of Health and Human Services and approximately 600 drug manufacturers have contractually agreed to provide guaranteed access to medications, and in exchange participating states get effectively the lowest price among payers. In 2017 manufacturers provided $39.5 billion in rebates, which are shared by the federal government and states, to the Medicaid program alone. States already have significant flexibility under the statute to manage drug spending. Current law already provides states with authority to create preferred drug lists, and even formularies, as well as use other statutory utilization management tools to manage drug spending.

About PhRMA

The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading innovative biopharmaceutical research companies, which are devoted to discovering and developing medicines that enable patients to live longer, healthier and more productive lives. Since 2000, PhRMA member companies have invested more than $600 billion in the search for new treatments and cures, including an estimated $79.6 billion in 2018 alone.

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