Government
Medicaid paying too much for drugs
NEWS IN BRIEF — Posted March 21, 2005
Medicaid has been overpaying for some of the drugs it buys due to a lack of federal oversight, according to a new report from the Government Accountability Office. The report faulted the Centers for Medicare & Medicaid Services for poorly regulating how companies calculate their average price and for doing infrequent checkups on the market to verify the prices charged by the firms. Federal statute requires manufacturers to offer Medicaid the lowest market price.
"For the last 10 years, federal officials have left the program vulnerable to tremendous waste, fraud and abuse," said Sen. Chuck Grassley (R, Iowa), chair of the Senate Finance Committee. "Administrators need to move quickly to update the way these prices are determined to prevent taxpayers from being shortchanged hundreds of millions, and possibly billions, of tax dollars."
President Bush's 2006 budget plan proposes fixing the faulty pricing technique as one way the government can curtail growing Medicaid costs.
Note: This item originally appeared at http://www.ama-assn.org/amednews/2005/03/21/gvbf0321.htm.
