Hearing of Committee on Finance -Grassley: Federal Officials Must Get Control of Medicaid Drug Rebate Program
Hearing of Committee on Finance -Grassley: Federal Officials Must Get Control of Medicaid Drug Rebate Program
Sen. Chuck Grassley said today that the federal government needs to take a much more aggressive role in controlling Medicaid spending on prescription drugs by making sure that states get the full rebate they're entitled to through the Medicaid drug rebate program.
Grassley made his comments in response to a new report of the Government Accountability Office, which he requested along with Rep. Henry Waxman. The report found that the Center for Medicare and Medicaid Services - which administers the federal Medicaid program - was negligent in making sure that drug prices and, in turn, Medicaid drug rebates were
determined in an accurate way.
"For the last ten years, federal officials have left the program vulnerable to tremendous waste, fraud and abuse," Grassley said. "Administrators need to move quickly to update the way these prices are determined to prevent taxpayers from being shortchanged hundreds of millions, and possibly billions, of tax dollars."
Drug manufacturers pay rebates to states based on prices and financial concessions manufacturers make available to entities that purchase their drugs. Today's GAO report said that the Medicaid drug rebate program does not incorporate payments negotiated by pharmacy benefit managers on behalf of third-party payers, in particular, and that affects the amount of the rebate payments made to states.
A separate report issued last November by Taxpayers Against Fraud said that $535 million in federal dollars and $413 million in state dollars had been recovered through whistleblower cases against drug manufacturers in Medicaid drug pricing fraud cases from 2001 to 2003. Additional settlements are expected, according to the report, because approximately
100 whistleblower cases remain under seal and involve allegations against over 200 drug manufacturers.
Grassley said that the whistleblower provisions of the False Claims Act are proving to be a valuable weapon in protecting the Medicaid program against fraud by drug makers, but "no time should be wasted by CMS in bringing its own methods up to date and preventing this waste of resources for such an important health care program."
The new GAO report is titled "Medicaid Drug Rebate Program. Inadequate Oversight Raises Concerns about Rebates Paid to States." Its reference number is GAO-05-102. It can be ccessed today at www.gao.gov.
http://finance.senate.gov/press/Gpress/2005/prg030705.pdf