WASHINGTON - The federal government this week announced a rule change it says will save the federal-state Medicaid program $17.7 billion over the next five years. Called for in the 2010 federal health law, the new rules for prescription drug pricing are based in part on an innovation pioneered in Alabama.
Instead of paying for drugs based on drug company price lists, which are often inflated, Alabama decided a few years ago to start paying local pharmacies for prescriptions based on what they actually paid for the medicines. After getting permission in September 2010 from the U.S. Department of Health and Human Services, the state Medicaid program started collecting receipts from local pharmacies to create a new pricing benchmark.
The result was a 6 percent reduction in Alabama’s Medicaid pharmacy bill - a savings of $30 million in the first year. Since then, Oregon, Idaho and California have followed suit.
Sunday, February 05, 2012
New rules could save billions in prescription drug costs - BostonHerald.com