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

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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.

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Acknowledgements

The authors thank Drs. Peter Cunningham, Lindsay Sabik, and April Kimmel for their comments.

Author contributions

ABT and NVC collaborated on this paper’s concept and design, and ABT drafted the manuscript and performed the statistical analyses. NVC is the guarantor for the overall content of this article.

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Authors and Affiliations

  1. Truven Health Analytics, An IBM Company, 7700 Old Georgetown Rd, 6th Floor, Bethesda, MD, 20814, USA

    Ali Bonakdar Tehrani

  2. Department of Pharmacotherapy and Outcomes Science, School of Pharmacy, Virginia Commonwealth University, 410 N 12th Street, Richmond, VA, 23219, USA

    Norman V. Carroll

Authors
  1. Ali Bonakdar Tehrani
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  2. Norman V. Carroll
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Corresponding author

Correspondence to Ali Bonakdar Tehrani.

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Conflict of interest

Ali Bonakdar Tehrani and Norman V. Carroll declare no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

This study was partially supported by funding from the Susan G. Komen foundation (GTDR14302086).

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Bonakdar Tehrani, A., Carroll, N.V. The Medicaid Rebate: Changes in Oncology Drug Prices After the Affordable Care Act. Appl Health Econ Health Policy 15, 513–520 (2017). https://doi.org/10.1007/s40258-017-0314-1

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