U.S. Is Proposing to Cut Medicaid’s Drug Payments (1 Viewer)

[RightinNYC]

The Bush administration on Monday will propose sweeping reductions in payments to pharmacies as a way to save money for Medicaid, the health program for more than 50 million low-income people.

The goal is to ensure that Medicaid can get drug discounts similar to those provided to large customers in the private market, including companies like Caremark Rx and Medco Health Solutions that manage drug benefits for people who have health insurance through an employer. Congressional investigators have found that Medicaid pays 35 percent more than the lowest price available in the private market for some commonly used brand-name drugs.

Consumers would not be directly affected by the proposed changes. But federal officials said they hoped consumers would press for lower drug prices after checking the price list, which will be posted on a Web site.

Federal officials said the rule would save $8.4 billion over the next five years. That represents a 5.6 percent reduction in total projected Medicaid spending on prescription drugs in those years. The administration estimates that the federal government would save $4.9 billion, and the states would save $3.5 billion, if the proposed rule is adopted.

In a document analyzing the proposals, the Department of Health and Human Services estimates that more than 90 percent of the savings would come from pharmacies. The rest would come from drug companies, which would, for example, be required to give price concessions on certain drugs administered in doctors’ offices.

In the proposed rule, the Bush administration takes steps to ensure that Medicaid gets the best price available to any buyer. In determining the best price, it says, manufacturers must offer the government the benefit of any “rebates, discounts or other price concessions” given to the pharmacy benefit managers like Caremark Rx and Medco Health Solutions.

This sounds pretty good to me. There is understandably opposition from the pharmacies, but it seems like this falls under the least harm principle. And I have no problem with saving $9 billion.

(As a side note, I love that from just reading the headline and the opening paragraph, you'd assume that Bush was proposing that we beat and kill all poor people.:lol: )