September 30, 2019


Closes loophole exploited by pharma companies to profit off of patients

Washington, D.C. – Congressman Joe Kennedy III (D-MA) applauded the enactment of his Fair and Accurate Medicaid Pricing Act as a part of the continuing resolution. By forcing pharmaceutical companies to accurately calculate prices in the Medicaid drug rebate program, this legislation closes a loophole that will save taxpayers an estimated $3.1 billion over the next decade.

“Pharmaceutical companies should not be padding their profits by exploiting loopholes in Medicaid and draining resources that would be better spent on increasing access to care. With the enactment of our bipartisan Fair and Accurate Medicaid Pricing Act, we can use these savings to invest in programs that help our neighbors. Now that we have closed this loophole in our laws, we can continue our efforts to lower drug prices for all patients in this country.”

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 and reduced rebates the manufacturers owe.

The Fair and Accurate Medicaid Pricing Act is also cosponsored by Congressman Adam Kinzinger (IL-16), 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).

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For Immediate Release:
September 30, 2019 

Dan Black (202) 225-5931