How Does the Medicaid Rebate Cap Affect Brand-Name Drug Prices?

MedicalResearch.com Interview with:

Sean Dickson, JD MPH Officer, Drug Spending Research Initiative The Pew Charitable Trusts Washington, DC 20004

Sean Dickson, JD MPH

Sean Dickson, JD MPH
Officer, Drug Spending Research Initiative
The Pew Charitable Trusts
Washington, DC 20004

MedicalResearch.com: What is the background for this study?

Response: Price increases on existing drugs are an ongoing challenge for patients and insurers, including government programs like Medicaid and Medicare. The Medicaid program requires drug manufacturers to provide a rebate that offsets price increases greater than inflation, but that rebate is capped once price increases exceed 433 percent above inflation.

When these rebates are capped, manufacturers may find it more profitable to take very large price increases, raising costs for all payers. The Medicaid program has proposed removing the cap, and this study considers the effects of that proposal.  Continue reading