Drugs imported by states under the Trump administration’s importation plan will not be subject to Medicaid rebates, which means they would not set new 340B prices according to CMS guidance released Friday.
The state guidance calls into question whether states will be able to save significant amounts of money through Medicaid buying imported drugs compared with the large statutory rebates already conferred by the Medicaid rebate program. The Medicaid rebate program also determines 340B ceiling prices, so any potential state importation programs would be excluded from factoring into those prices.
“If states cannot get rebates on top of importation, Medicaid is unlikely to benefit,” Kaiser Family Foundation Senior Policy Analyst Rachel Dolan tweeted Friday.
HHS has declined to detail savings for its importation proposals, and a senior administration official said on Friday that it is impossible to run a complete actuarial analysis without more data on individual states’ plans for importation.
The savings from drug importation would hinge on how low states could get drug prices and how widely the imported drugs would be distributed, said Georgetown University Research Professor Edwin Park.
“Medicaid gets largest discounts besides the [Department of Veterans Affairs], so the question is whether the imported price going to be so low that the states are better off,” Park said.
The drugs that have high list prices, which makes them targets for importation, already likely have to pay large Medicaid inflationary rebates, Dr. Walid Gellad, an associate professor of health policy at the University of Pittsburgh, tweeted Friday.
However, state Medicaid programs may not need to be a primary beneficiary of importation programs, said health policy consultant Jane Horvath. Consumers already pay low copays for drugs, and the importation programs must demonstrate savings to the consumer. The new CMS policy could help states so they don’t have to pay rebates to the federal government off of the imported price, Horvath said.
States could still save on drugs for state employee health programs, corrections or other programs.
On the contrary, CMS declared that drugs that manufacturers choose to re-import through an alternative pathway would be subject to Medicaid rebates, though the presumably lower list prices would not affect average price calculations for non-imported drugs.
The policy ensures that drugmakers cannot avoid rebate responsibilities for high-cost biologics and insulin, Park said.
If manufacturers or states have an issue with CMS’ decisions, they could raise a question as to whether the documents are subregulatory guidance that would have to go through notice and comment in order to be enforced, said Kip Piper, a Medicare and Medicaid expert and senior consultant with ADVI.