Skip to main content
U.S. flag

An official website of the United States government

Here’s how you know

Dot gov

The .gov means it’s official.

Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.

Https

The site is secure.

The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

CMS.gov Centers for Medicare & Medicaid Services CMS.gov Centers for Medicare & Medicaid Services opens in new window
CMS.gov Centers for Medicare & Medicaid Services
Centers for Medicare & Medicaid Services

Main header

  • About Us
  • Newsroom
  • Data & Research
Newsroom

Newsroom_Navigation

  • Press Kit
  • Data
  • Contact
  • Blog
  • Podcast

 

 

 

Press release

AFFORDABLE CARE ACT WILL SAVE STATES AND TAXPAYERS $17.7 BILLION ON PRESCRIPTION DRUGS

Jan 27, 2012
  • Affordable Care Act
  • Medicaid & CHIP
  • Medicare Part C
  • Pharmacies
  • Prescription drugs

Share

opens in new window opens in new window opens in new window

AFFORDABLE CARE ACT WILL SAVE STATES AND TAXPAYERS $17.7 BILLION ON PRESCRIPTION DRUGS
PROPOSED RULE CUTS COSTS AND INCREASES TRANSPARENCY IN MEDICAID PRESCRIPTION DRUG PRICING

WASHINGTON, D.C. – Provisions in the health care reform law, the Affordable Care Act, will save taxpayers and States an estimated $17.7 billion over five years on prescription drugs bought through Medicaid, according to estimates in a proposed rule issued today by the Centers for Medicare & Medicaid Services (CMS).

Today’s announcement, implementing the Medicaid prescription drug provisions of the Affordable Care Act, will increase transparency in drug pricing and ensure taxpayers and States are not overpaying for prescription drugs.  

“Thanks to the Affordable Care Act, we will save taxpayers billions of dollars each year on prescription drugs in Medicaid,” said CMS Acting Administrator Marilyn Tavenner.  “Today's announcement puts in place simple measures that will cut costs, increase transparency and benefit consumers.”

The proposed regulation reduces costs through a number of improvements, including:

  • Aligning reimbursement rates to better reflect the actual price the pharmacy pays for the drug;
  • Increasing rebates paid by drug manufacturers that participate in Medicaid, and;
  • Providing rebates for drugs dispensed to individuals enrolled in a Medicaid managed care organization.

Several States have implemented similar initiatives to inject fairness into prescription drug pricing.  Alabama, for example, estimates a savings of $30 million in one year alone from an initiative to better understand and align reimbursements with the prices pharmacies pay for prescription drugs.

In 2009, Medicaid spent $15.8 billion on prescription drugs.  This proposed rule will implement initiatives designed to save the program $17.7 billion over five years.

The Medicaid Pharmacy Regulation notice of proposed rulemaking can be found in the Federal Register at: http://www.ofr.gov/OFRUpload/OFRData/2012-02014_PI.pdf .

The Proposed Rule will publish in the Federal Register on February 2, 2012 at which time it can be viewed here – http://www.gpoaccess.gov/fr/.  The comment period will close on April 2, 2012.

Stakeholders will have 60 days from the publication date to submit public comments.  CMS plans to issue a final rule in 2013.

###

  • Previous
  • Next

Related Releases

  • 2021 Marketplace Special Enrollment Period Report
    Apr 07, 2021
  • HHS Secretary Becerra Announces More Than 500,000 Americans Have Enrolled in Marketplace Coverage During Special Enrollment Period
    Apr 07, 2021
  • Secretario de Salud y Servicios Humanos Xavier Becerra anuncia reducción de costos y expansión de acceso a cobertura de salud en el Mercado de Salud bajo American Rescue Plan
    Apr 01, 2021
  • HHS Secretary Becerra Announces Reduced Costs and Expanded Access Available for Marketplace Health Coverage Under the American Rescue Plan
    Apr 01, 2021
  • 2021 Special Enrollment Period Access Extended to August 15 on HealthCare.gov for Marketplace Coverage
    Mar 23, 2021

Contact us

CMS News and Media Group
Catherine Howden, Director
Brian Leshak, Deputy Director
Jason Tross, Deputy Director

Media Inquiries Form
202-690-6145

Get email updates

Sign up to get the latest information about your choice of CMS topics in your inbox. Also, you can decide how often you want to get updates.

CMS & HHS WEBSITES

  • Medicare.govopens in new window
  • Medicaid.govopens in new window
  • InsureKidsNow.govopens in new window
  • HealthCare.govopens in new window
  • HHS.govopens in new window

HELPFUL LINKS

  • Acronyms
  • Archive
  • Contacts
  • Glossary
  • Privacy policy
  • Privacy settings

RSS FEEDS

  • Newsroom
  • Blog
  • Podcast
U.S. Department of Health & Human Servicesopens in new window Centers for Medicare & Medicaid Servicesopens in new window

A federal government website managed and paid for by the U.S. Centers for Medicare & Medicaid Services.

7500 Security Boulevard, Baltimore, MD 21244

opens in new window opens in new window opens in new window

TOOLS

  • Web policiesopens in new window
  • Plain languageopens in new window
  • No Fear Actopens in new window
  • Freedom of Information Actopens in new window
  • Inspector Generalopens in new window