Mr. President, I rise today to with Senators Kerry, Akaka, Salazar and Whitehouse to introduce the Drug Rebate Equalization Act of 2007. As you know, the Medicaid drug rebate ensures that State…
Mr. President, I rise today to with Senators Kerry, Akaka, Salazar and Whitehouse to introduce the Drug Rebate Equalization Act of 2007.
As you know, the Medicaid drug rebate ensures that State Medicaid programs receive the best price for prescription drugs for their beneficiaries. Unfortunately, health plans that serve over 10 million Medicaid beneficiaries cannot access the same discounts
through the Federal drug rebate program. Plans typically get no rebate on generic drugs and about a third of the rebate on brand drugs as States receive. Therefore, States are paying more for the acquisition of prescription drugs for these health plan enrollees than for beneficiaries in fee-for-service Medicaid, raising costs for Federal and State governments.
Even with this price disadvantage, the total cost of prescription drugs for health plans is less on a per member per month basis because of health plans' greater use of generics and case management. Unfortunately, many States are considering carving prescription drugs out from health plans for the sole purpose of obtaining the rebate, thereby undermining plans' ability to maintain a comprehensive care and disease management program that includes prescription drugs. Not only will this legislation save money, it will eliminate this incentive and ensure that health plans can maintain a comprehensive care coordination system for their patients.
This policy change was passed by the Senate during last year's debate over the Deficit Reduction Act. This year's version of the bill improves on last year's bill in several important ways. First, the bill ensures that health plans can continue their good work by using their own integrated care coordination and disease management protocols. Second, the bill will maintain the fee-for-service prohibition against health plans ``double dipping'' into the Medicaid drug rebate and the 340b discount drug pricing program. Finally, it will ensure that plans can use so-called positive formularies while simultaneously ensuring that enrollees will have access to off-formulary drugs through the regulated prior authorization process. These changes significantly improve the bill and will help improve its chances of passage.
This policy enjoys widespread support. Extending the Medicaid drug rebate to enrollees in health plans is supported by the National Governors Association, the National Association of State Medicaid Directors, the National Medicaid Commission, the National Association of Community Health Centers, the Partnership for Medicaid, the Association for Community Affiliated Plans, and the Medicaid Health Plans of America. I am entering into the record copies of letters provided by these organizations over the last few years memorializing their support for this concept.
Last year, the Congressional Budget Office estimated that the Bingaman amendment would have saved Federal taxpayers $1.7 billion over 5 years. Likewise, the CMS Office of the Actuary estimated that extending the drug rebate to health plans would save Federal taxpayers $2.2 billion over 5 years. I think that we can say that this policy will provide significant savings to Americans, whatever the number.
I urge my colleagues to join me in supporting this legislation.
I ask unanimous consent that the text of the bill and letters of support be printed in the Record.