In 2017, a new penalty was imposed on generic manufacturers participating in the Medicaid program. Targeting price increases exceeding the rate of inflation, the Medicaid Generics Penalty ignores important market differences between generics and brand-name drugs. The rule unfairly penalizes manufacturers for price fluctuations outside of their control, increases the risk of drug shortages and threatens the continued availability of low-cost generics to patients.
Access to safe, affordable generic medication matters to millions of patients, and is particularly important to individuals and families with Medicaid coverage. Annually, generics reduce prescription drug costs by $817 per Medicaid enrollee. Unless it is repealed, the Medicaid Generics Penalty could destabilize the robust market for generic drugs and impede patient access to affordable, lifesaving drugs.
This is a priority issue for us, with an ongoing patient and grassroots education campaign. Eliminating the penalty is one of our top six policy solutions. Read more on our blog.
- Repeal the Medicaid Generics Penalty
- Bates White: Penalizing Generic Drugs with the CPI Rebate Will Reduce Competition and Increase the Likelihood of Drug Shortages
- The Medicaid Generics Penalty: A Primer (Part 1)
- The Medicaid Generics Penalty: Understanding Market Dynamics (Part 2)
- The Medicaid Generics Penalty: Barrier to Generic Competition (Part 3)