Republicans Ask for Changes to Medicaid Drug Rule

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By Bronwyn Mixter

Oct. 28 — A group of 23 Republican lawmakers Oct. 28 asked the Office of Management and Budget to revise a pending CMS rule that would subject innovations for abuse-deterrent versions of opioids to additional Medicaid rebate obligations.

The proposed rule, issued by the Centers for Medicare & Medicaid Services in 2012 (77 Fed. Reg. 5,318, Feb. 2, 2012) (CMS-2345-F), would penalize innovation in a field that is important to the fight against prescription drug abuse, the lawmakers said in a letter. The White House OMB started its review of the final rule on Medicaid outpatient drug reimbursement in August.

“We are concerned that unless there are substantial modifications to the proposed rule, under the final rule, manufacturers of medications with abuse-deterrent formulations (ADF) would be subject to additional rebate obligations under the Medicaid program,” the letter said. “This policy outcome would be a misunderstanding of Congressional intent. Additional mandatory rebate obligations would also serve as a strong disincentive for industry leaders developing ADF products that can help reduce prescription opioid overdose deaths in our country.”

The letter, spearheaded by Senate Finance Committee Chairman Orrin G. Hatch (R-Utah) and House Energy & Commerce Committee Chairman Fred Upton (R-Mich.), garnered the support of nearly two dozen Republican lawmakers in both the Senate and House.

In comments on the proposal submitted in 2012, stakeholders said they have concerns, including administrative burdens associated with it, rebate provisions and various definitions related to pricing.

The Centers for Disease Control and Prevention (CDC) estimates that opioid abuse costs the U.S. economy tens of billions of dollars each year in lost productivity and health-care costs, according to a press release from the lawmakers. Currently, more than 4 million Americans misuse or abuse prescription painkillers, and more than 16,000 individuals die from prescription painkiller overdoses each year.

Drug overdose related deaths account for the majority of injury-related deaths in the country, the press release said.

The Oct. 28 letter is addressed to Howard Shelanksi, administrator of the Office of Information and Regulatory Affairs at the OMB. According to information on the OMB's reginfo.gov website, the final CMS rule “revises requirements pertaining to Medicaid reimbursement for covered outpatient drugs to implement provisions of the Affordable Care Act.” The rule “also revises other requirements related to covered outpatient drugs, including key aspects of Medicaid coverage, payment, and the drug rebate program,” the OMB said.

To contact the reporter on this story: Bronwyn Mixter in Washington at bmixter@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

The letter is at http://src.bna.com/NR.

The proposed rule is at http://www.gpo.gov/fdsys/pkg/FR-2012-02-02/html/2012-2014.htm.