April 02,2019

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Wyden, Grassley Praise Congressional Passage of Right Rebate Act

Bipartisan Drug Bill Is First to Pass This Congress, Hold Drug Makers Accountable for Manipulating Medicaid for Higher Profit

Washington, D.C. – Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and Senate Finance Committee Chairman Chuck Grassley, R-Iowa, today celebrated congressional passage of their bill to prevent drug makers from manipulating Medicaid to gouge taxpayers and increase profits by misclassifying their drugs. The legislation was included in a broader package of Medicaid policies, called the “Medicaid Services Investment and Accountability Act of 2019.” The bill now goes to the president to be signed into law.

“Today demonstrates that Congress can come together and clamp down on Big Pharma’s excesses,” Wyden said. “The Right Rebate Act is a meaningful step towards preventing drug manufacturers from illegally enriching themselves off taxpayer dollars. There’s much more work to be done in the days ahead, but this bill heading to the president’s desk is a promising sign of what can be accomplished.”

“Pharmaceutical companies that participate in the Medicaid Drug Rebate Program and make billions of dollars every year, much of it coming from taxpayer-funded programs like Medicaid, should not be allowed to bypass government oversight and scrutiny,” Grassley said. “Those companies that intentionally defraud taxpayers by exploiting a government loophole need to be aware that what they’re doing isn’t just wrong, it will soon be subject to penalty under the Right Rebate Act.”

The bill, called the “Right Rebate Act,” gives the Department of Health and Human Services the authority to reclassify a drug, recoup rebates, and go after drug manufacturers when they are suspected of purposely misclassifying branded products as generics. An HHS Inspector General report revealed this loophole cost state and federal Medicaid programs $1 billion between 2012 and 2016.

A one page summary of the bill can be found here. A section-by-section summary can be found here.

The full legislative text of the bill can be found here.

The “Medicaid Services Investment and Accountability Act of 2019” also included provisions to provide pediatric health homes to children with medically complex conditions, extend federal funding for clinics that provide crisis and outpatient behavioral health services, protect spouses of individuals receiving long-term services and supports at home or in the community from going into poverty, and additional funding for the Money Follows the Person grant program. More information on that bill can be found here.