Legal Challenge to Medicaid Drug Rebates Rule Seen as Likely

A Biden administration final rule aimed at driving down the cost of prescription drugs in Medicaid may face legal challenges despite having dropped several contentious provisions from the proposed version, lawyers say.

The rule from the Centers for Medicare and Medicaid Services (RIN: 0938-AU28) seeks to strengthen oversight and transparency around how drug companies negotiate prices with Medicaid. The CMS clarified several statutory ambiguities that the it says have allowed drug companies to pay lower rebates to states and ultimate increase the cost of prescription drugs.

The agency had expressed concerns that manufacturers were misclassifying their drugs in ...