Medicaid patients have received higher rebates for their prescription drugs than patients enrolled in the Medicare Part D program, according to an August report by the Dept. of Health and Human Services Office of Inspector General.

Medicaid, which uses a statutory inflation-based formula to set discounts, collected $2.9 billion in rebates from drug manufacturers for every $6.4 billion in expenditures in 2009, the report found. Part D, which relies on rebates negotiated with drug companies, collected only $4.5 billion in rebates for every $24 billion worth of spending. Medicaid drug costs were $26 billion in 2009. 

Unlike the Medicaid program, the Part D plans operated by private contractors negotiate rates with drug manufacturers without any federal statutory requirements on rebate amounts, CMS Principal Deputy Administrator Marilyn Tavenner said in a memo responding to the report. The government is prohibited by statute from instituting a price structure for drug payments under Part D.

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