Commentary Highlights Ways for Medicaid to Tackle High Drug Prices

November 22, 2022

The law mandates that Medicaid must pay for any drugs approved by the US Food and Drug Administration (FDA). This includes high-price drugs approved through accelerated processes, which come with limited data that often negatively impacts reimbursement decisions with other payers. In a recent commentary in JAMA Health Forum, authors describe 4 novel ways that policymakers can handle the problem.

According to Frank Diamond, “Give Medicaid the power to exclude AAP drugs from its formulary on the grounds that they have not been proven to have medical efficacy, the authors said. That could be done through waivers, something that Massachusetts and Oregon have already applied for. The Centers for Medicare & Medicaid Services (CMS) already rejected Massachusetts’ request, although legal scholars argue against CMS’ reasoning.”

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