Medicaid Generics Penalty

In 2017, a new penalty was imposed on generic manufacturers participating in the Medicaid program. Targeting price increases exceeding the rate of inflation, the Medicaid Generics Penalty ignores important market differences between generics and brand-name drugs. The rule unfairly penalizes manufacturers for price fluctuations outside of their control, increases the risk of drug shortages and threatens the continued availability of low-cost generics to patients.

Access to safe, affordable generic medication matters to millions of patients, and is particularly important to individuals and families with Medicaid coverage. Annually, generics reduce prescription drug costs by $817 per Medicaid enrollee. Unless it is repealed, the Medicaid Generics Penalty could destabilize the robust market for generic drugs and impede patient access to affordable, lifesaving drugs