NY – New Rule Targets Prescription Drug Costs

June 2017 ~

New York Medicaid regulators hope the call for increased scrutiny of prescription drugs under new state regulations will encourage drugmakers to offer more rebates to low-income people as well as pass on additional savings to the state when Medicaid drug spending rises.

The rules, signed into law in mid-April as part of the state’s budget, set an annual cap on Medicaid prescription drug spending and seek to keep total payments to medical inflation plus 5%.

The new law would explicitly allow regulators to pursue a type of review which utilize scientific studies and other information to evaluate whether specific medications are overpriced proportionate to their medical benefit.

To avoid having their drugs sent for such a review, prescription drugmakers could agree to add additional discounts. Manufacturers who opt not to offer a rebate or don’t agree to pass money back to the state when Medicaid drug spending increases, could face multiple layers of reviews regarding profit margins and how well their drugs work.

Source(s): Leavitt Partners; Kaiser Health News; USA Today; Pharmacist.com;