CSRxP Statement on the Costly New Abuse-Deterrent Drug Provision

Jul 8, 2016

Provision in Comprehensive Addiction and Recovery Act would cost Medicaid $75 million in drug rebate payments

Washington, DC – Wednesday, a costly new provision was included in the Comprehensive Addiction and Recovery Act conference report. This provision would exempt pharmaceutical manufacturers of new abuse-deterrent formulations of prescription drugs from charging lower prices to the Medicaid program. Under the Medicaid drug rebate program, states and taxpayers receive discounted prices in exchange for providing largely unrestricted access to prescription drugs for Medicaid beneficiaries. This new provision would exempt drug companies from giving better prices to Medicaid if their product is considered a new formulation of an abuse-deterrent drug, a categorization as easily achieved as making a pill more difficult to crush. The nonpartisan Congressional Budget Office estimates the forgone rebates would cost Medicaid $75 million between 2017-2026.

“With this provision, policymakers are rewriting the rules to benefit pharmaceutical manufacturers for slightly tweaking their product and reintroducing it as a new ‘innovation,’” CSRxP Executive Director John Rother said. “This is a giveaway leaves taxpayers to make up the difference, which the nonpartisan CBO estimates at $75 million. Given our nation’s opioid epidemic, pharma companies have a civic responsibility to build abuse-deterrent formulations into their development programs and should not reap additional profits from doing what’s right. Moreover, this is exactly the kind of action that stifles competition in the market and keeps lower cost alternatives from patients.”