Biden-Harris Propose Boosting Medicaid Drug Transparency

The Biden-Harris Administration has made lowering prescription drug costs in America a key priority — and President Biden continues to deliver results. Today, the U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), proposes steps to drive down prescription drug costs in Medicaid further and build on President Biden’s executive order to lower prescription drug costs for Americans.

Proposed Rule to Shed Light on Actual Drug Costs

CMS’ latest notice of proposed rulemaking (NPRM) would shed light on the cost of drugs covered by Medicaid. Under this proposal, Medicaid would have increased the ability to hold drug manufacturers accountable for what Medicaid programs pay for drugs.

Support from HHS Secretary and CMS Administrator

HHS Secretary Xavier Becerra and CMS Administrator Chiquita Brooks-LaSure both support the proposed rule, emphasizing the importance of transparency in prescription drug costs and the financial integrity of the Medicaid program.

Medicaid Drug Rebate Program Improvement

Today’s proposed rule to improve the Medicaid Drug Rebate Program follows the Biden-Harris Administration’s historical creation of the Medicare Prescription Drug Inflation Rebate Program, requiring drug companies to pay rebates to Medicare when their prescription drug prices increase faster than the rate of inflation for certain drugs dispensed to people with Medicare.

Increase Transparency of Prescription Drug Costs

This rule would give CMS more insight into what the most expensive drugs today actually cost to manufacture and distribute. The proposed regulation would give CMS and states additional tools to increase transparency, such as a drug price verification survey, which would help states better negotiate what the Medicaid program pays for high-cost drugs. For additional information on the drug price verification survey, visit Medicaid.gov.

Increase Transparency of Managed Care Plans

Another proposed provision aims to enhance transparency into the costs of administering drug benefits in Medicaid-managed care plans, focusing on contracts between states, Medicaid-managed care plans, and third-party contractors, such as pharmacy benefit managers (PBMs).

Increased Transparency in Drug Classifications

The NPRM also focuses on the potential misclassification of drugs as brand name or generic, with provisions to ensure states receive the appropriate rebates to which they are entitled. For additional information on these and other provisions in the NPRM, please visit the Federal Register. CMS looks forward to accepting public comment on the NPRM through July 25, 2023.