OIG Compares Medicare Part D and Medicaid Drug Rebates
An HHS Office of Inspector General (OIG) report released August 16, 2011 found that Medicaid’s net unit drug costs (i.e., pharmacy reimbursement minus rebates) were much lower than under Medicare Part D because of substantially higher Medicaid rebates for brand-name drugs. Specifically, while Part D sponsors and state Medicaid agencies paid pharmacies similar prices for the top 100 brand-name drugs, Medicaid recouped 45% of its drug spending in rebates compared to Part D sponsor recoupment of 19% of their drug spending in rebates. Rebates for the top 100 generic drugs under both programs were negligible. In the report, “Higher Rebates for Brand-Name Drugs Result in Lower Costs for Medicaid Compared to Medicare Part D,” the OIG recommends that CMS continually examine differences in rebates across Medicaid and Part D.
