Leavitt Calls for Reform of Medicaid Rx Reimbursement

HHS Secretary Michael Leavitt has called for eliminating wasteful spending on Medicaid, including by changing the way the government pays for prescription drugs under the program.

In a recent speech, Leavitt said the government should stop overpaying for prescriptions drugs under Medicaid, a federal and state healthcare program for low-income individuals and families. Reforming the Medicaid drug reimbursement structure would save the federal government approximately $15 billion and state governments roughly $11 billion over the next 10 years, he said.

"Pharmacies and Medicare buy drugs wholesale for a low price, but under Medicaid, state governments usually pay a much higher price," Leavitt said. He called for legislation that would allow states to pay the same lower rate as those under the other programs. "It's a common sense change," Leavitt told the World Heath Care Congress conference in Washington, D.C.

Some lawmakers already have said they plan to address the issue. House Energy and Commerce Committee Chairman Joe Barton (R-Texas) last December said he would introduce legislation in the 109th Congress to change the Medicaid drug reimbursement structure.