As a way of assessing the potential future impact of the CPI-based Medicaid Generics Penalty, Bates-White Economic Consulting examined publicly available data on historical drug prices and performed calculations of the potential impact of CPI-based rebates had they been in place in the past. This report shows evidence to suggest that in certain cases, these price regulations may have precisely the opposite of their intended effect. The imposition of penalties is likely to reduce competition in generic drug markets, lead to fewer companies competing in the market, and increase the likelihood of shortages.
Issues