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Oklahoma’s new Medicaid only pay for working drugs

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Medicaid prescriptionsAP

  • Under the conditions of a new Medicaid program in
    Oklahoma, the state will only pay drugmakers the full
    agreed-upon price of the drug if it works as
    advertised. 
  • Oklahoma’s plan is part of the
    Trump administration
    ‘s commitment to
    lower drug prices. 

Oklahoma’s Medicaid program this month will start
implementing a first-in-the-nation drug pricing policy where
it will only compensate drug companies the full price for their
medication if they work exactly as advertised.

This type of rebate program aims to hold pharmaceutical companies
accountable for the efficacy and safety of their drugs. The
program is state-wide and will not affect the pricing of drugs in
any other states.  

The program works as follows: Oklahoma and the drug companies
agree on a certain price for a certain medication. If the drug
works as promised, the states pay the drug company the full
price. But if it falls short in terms of effectiveness, then the
state only pays the drug company a fraction of the initial
agreed-upon price. 

If it works, it could save the state an estimated $2
million. 


It’s all part of of the Trump administration’s plan to lower drug
prices. 

“Oklahoma’s plan for value-based drug contracts is an
important example of how states can innovate to bring down drug
costs,” Secretary Alex Azar said in a Center for Medicaid and
Medicare services
press release
in June when the plan was first announced. “The
Trump Administration is committed to giving states the
flexibility they need to make healthcare more affordable, and
strongly supports innovations like value-based purchasing for
prescription drugs.”

The state, however, is not forcing drug companies to participate
in the program. Sign-up is voluntary, but can positively affect
company reputation. Additionally, drug companies that do sign up
will have their effective products that have passed through this
system put on a preferred drug list, which could result in more
profit in the long run.

See also:


Business Insider Intelligence Exclusive FREE Report: The 5 Ways AI Will Change U.S. Healthcare


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