HHS Reacts to Court Ruling on Medicaid Reimbursements for Generic Drugs
HHS is seeking to limit the scope of a judge's decision last week to temporarily halt a rule implementing a new formula for drug reimbursements under Medicaid, Dow Jones reports (Wisenberg Brin, Dow Jones, 12/18). U.S. District Court Judge Royce Lamberth in Washington, D.C., on Friday granted a preliminary injunction that prohibits HHS from adopting a new method for calculating an upper limit on payments for generic drugs covered by Medicaid.The rule would have redefined how the upper limit is calculated, using the average manufacturer price as a basis. According to CMS, the rule would have saved the federal government and states $8.4 billion over the next five years (Kaiser Daily Health Policy Report, 12/18).
HHS argues that the injunction should not prevent Medicaid from using the new AMP data to calculate rebates that drug makers must pay states for prescription drugs under Medicaid. The agency believes that if manufacturers continue to use the old method for calculating AMPs, a "significant and costly alteration of the status quo" would result (Dow Jones, 12/18). This is part of the Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
