PHARMA/HEALTH PLANS/PBMs/POLICY: Meanwhile Ignangi on drug pricing, best price and fraud

I’m listening to the webcast of the KFF Forum on Medicare, and in the middle Karen Ignagni comes out with this gem.

But Karen Ignagni, president and CEO of America’s Health Insurance Plans, countered that so far, health insurers are beating Uncle Sam at the negotiating table. "I’m hearing shock from (state) Medicaid directors that we’re getting better prices than they are," she told UPI. "I don’t know of any other government program where the real costs are less than the estimates," she said, arguing that the plans are offering "affordable products" with low premiums and low deductibles.

Ignagni is either lying here (or massively overstating the truth from a few anecdotes), or going to find a few men in sharp suits from the rich part of K street funded by big Pharma coming down to see her carrying baseball bats.

You see, Medicaid plans get from pharma manufacturers what’s known as “best price”. In other words if they give a better price to another customer, they also have to give that price to Medicaid. Medicaid is still of course buying its drugs for its non-Medicare dual eligible population. The drug companies know this, so I doubt that what she’s saying is true. But if it is true that Ignagni’s health plan members are getting a better price than the states are, then the states can go back to the pharma manufacturers to get a better rebate — oh, and also prosecute Pharma companies for fraud over not giving them best price, as has happened many times.

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  1. I thought the exact same thing when I read that–but I wasn’t sure if maybe there was an exception somewhere in the Medicare Part D stuff.