The OIG has issued a report, Medicaid Rebates for Brand-Name Drugs Exceeded Part D Rebates by a Substantial Margin,” comparing statutory Medicaid rebate amounts for brand name drugs with rebates Part D plan sponsors negotiate with drug manufacturers for such drugs. Based on 2012 data, the OIG determined that total rebates under Medicaid were substantially higher than total rebates under Medicare Part D ($16.7 billion vs. $10.3 billion), even though Medicaid drug expenditures were much lower than Medicare Part D expenditures in 2012 ($35.7 billion vs. $66.5 billion). Rebates accounted for 47% of Medicaid expenditures in 2012, while rebates totaled 15% of Part D expenditures. The OIG also noted that more than half of Medicaid rebates owed by manufacturers for selected brand-name drugs were attributed to inflation-based add-on rebates. While recognizing the statutory limits on Part D rebate collection, the OIG recommends that “CMS and Congress to explore the costs and benefits of obtaining additional rebates under Part D,” potentially addressing beneficiaries eligible for both Medicare and Medicaid. “
