June 13, 2019


Closes loophole exploited by pharma companies to profit off of patients

Washington, D.C. – Continuing his effort to ensure health care is affordable and accessible, Congressman Joe Kennedy III today introduced the bipartisan Fair and Accurate Medicaid Pricing Act. 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 are dying because they cannot afford prescription drugs and pharmaceutical companies are lavishing in profits created by lax laws and inadvertent regulations. Closing this loophole in the Medicaid rebate program will shift the cost burden away from taxpayers, and place it back at the feet of pharma companies where it belongs. Patients deserve better than a private sector guided solely by profits and a public sector that continues to turn a blind eye.”

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 cosponsored by Congressman Adam Kinzinger (IL-16), Congressman Tom O’Halleran (AZ-01), and Congressman Jason Smith (MO-08). It also was introduced in the United States Senate by Senators Maggie Hassan (D-NH) and Bill Cassidy (R-LA).


For Immediate Release:
June 13, 2019 

Dan Black (202) 225-5931