OIG thinks generics should be subject to more Medicaid rebates


A new report by the Office of Inspector General found that some generic manufacturers keep raising their drug prices above the inflationary rate, making them deserve to pay more Medicaid rebates

If manufacturers keep jacking up the prices of their generic drugs, they should be subject to more Medicaid rebates, just as brand-name manufacturers are at present. That's the gist of a new Office of Inspector General report,which reviewed a list of the top 200 generic drugs, ranked by Medicaid reimbursement, from 1991 through 2004. It found that generic drug price increases exceeded the specified statutory inflation factor applicable to brand-name drugs for 35% of the quarterly average manufacturer prices reviewed. Had generic manufacturers been required to pay Medicaid rebates if their price increases exceed inflation as brand companies are, OIG believes Medicaid would have received $966 million in rebates from them for the products studied during this time period. OIG urged CMS to seek legislation to extend the rebate requirement to generic drugs.

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