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The Medicaid Rebate: Changes in Oncology Drug Prices After the Affordable Care Act

Author

Listed:
  • Ali Bonakdar Tehrani

    (Truven Health Analytics, An IBM Company)

  • Norman V. Carroll

    (Virginia Commonwealth University)

Abstract

Background Prescription drug spending is a significant component of Medicaid total expenditures. The Affordable Care Act (ACA) includes a provision that increases the Medicaid rebate for both brand-name and generic drugs. This study examines the extent to which oncology drug prices changed after the increase in the Medicaid rebate in 2010. Methods A pre-post study design was used to evaluate the correlation between the Medicaid rebate increase and oncology drug prices after 2010 using 2006–2013 State Drug Utilization Data. Results The results show that the average annual price of top-selling cancer drugs in 2006, adjusted for inflation and secular changes in drug prices, have increased by US$154 and US$235 for branded and competitive brand drugs, respectively, following the 2010 ACA; however, generic oncology drug prices showed no significant changes. Conclusions The findings from this study indicate that oncology drug prices have increased after the 2010 ACA, and suggest that pharmaceutical companies may have increased their drug prices to offset increases in Medicaid rebates.

Suggested Citation

  • Ali Bonakdar Tehrani & Norman V. Carroll, 2017. "The Medicaid Rebate: Changes in Oncology Drug Prices After the Affordable Care Act," Applied Health Economics and Health Policy, Springer, vol. 15(4), pages 513-520, August.
    • Handle: RePEc:spr:aphecp:v:15:y:2017:i:4:d:10.1007_s40258-017-0314-1
    DOI: 10.1007/s40258-017-0314-1
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    References listed on IDEAS

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