June 18, 2019


Closes loophole exploited by pharma companies to profit off of patients

Washington, D.C. – Congressman Joe Kennedy III (D-MA) and Congressman Adam Kinzinger (R-IL) today applauded the bipartisan passage of the Fair and Accurate Medicaid Pricing Act as a part of H.R. 3253. By forcing pharmaceutical companies to accurately calculate prices in the Medicaid drug rebate program, this legislation would close a loophole that costs taxpayers up to nearly $600 million annually.

“Patients should not be forced to forgo lifesaving medication because they cannot afford it and pharmaceutical companies should not be padding their profits on the backs of low-income Americans,” said Congressman Kennedy. “Through the savings realized under this legislation, we can strengthen and expand Medicaid while holding pharma companies accountable for their exploitative practices. If the Senate and White House work quickly, we can quickly sign this bill into law and continue these bipartisan efforts to protect patients and taxpayers.”
“For far too long, drug manufacturers have utilized a loophole to reduce their own financial obligations on prescription medications, which has put the burden directly on patients in my district and across the country,” said Congressman Kinzinger. “At a time when we’re facing rising prescription drug costs, our legislation will ensure that the needs of patients come first. I’m proud to see the Fair and Accurate Medicaid Pricing Act pass through the House today. It’s time we close this loophole and ensure drug prices are accurate and fair for patients.”
After Congress created the Medicaid drug rebate program in the early 1990s, subsequent legislation and CMS regulations inadvertently have allowed drug manufactures to create an arrangement whereby they sell authorized generics to secondary manufacturers for very low prices. These low sales prices, when added into the regular average manufacturer price (AMP) calculations, result in reduced manufacturers’ overall AMP, reduced rebates the manufacturers owe, and more burden placed on taxpayers and patients.

The Fair and Accurate Medicaid Pricing Act is also cosponsored by Congressman Tom O’Halleran (AZ-01) and Congressman Jason Smith (MO-08). It was introduced in the United States Senate by Senators Maggie Hassan (D-NH) and Bill Cassidy (R-LA).

“I am excited that the House of Representatives passed our bipartisan bill to prevent big pharmaceutical companies from taking advantage of a loophole and overcharging taxpayers for Medicaid costs,” Senator Hassan said. “I will continue urging my colleagues in the Senate to hold pharmaceutical companies accountable by passing this bipartisan bill as quickly as possible.”


For Immediate Release:
June 18, 2019 

Dan Black (202) 225-5931