Senate Passes Bipartisan Cassidy-Hassan Legislation to Protect Taxpayers, Close $3.1 Billion Medicaid Rebate Loophole

WASHINGTON, Sept. 26 -- Sen. Bill Cassidy, R-Louisiana, issued the following news release:

U.S. Senators Bill Cassidy, M.D. (R-LA) and Maggie Hassan (D-NH), announced today their Fair and Accurate Medicaid Pricing (AMP) Act passed the Senate and is now headed to the president's desk. The bipartisan legislation closes a loophole in the Medicaid rebate program which allows big pharma companies to overcharge taxpayers; it will save the taxpayers approx. $3.1 Billion over the next ten years. This legislation was included in the continuing resolution budget package passed by the Senate today.

"This is a victory for Louisiana Families and for Louisiana and American taxpayers. The bill is heading to President Trump's desk," said Dr. Cassidy. "This will fix a rigged system allowing companies to price gouge taxpayers and patients."

"Big pharmaceutical companies are making huge enough profits without unnecessary loopholes that come at the expense of the taxpayer," Senator Hassan said. "I am glad our bipartisan, commonsense legislation to hold pharmaceutical companies accountable and save taxpayer dollars was included in the funding package, and I look forward to seeing it become law."

The amount that a company is required to pay state governments in rebates through the Medicaid program is determined by a measure called the Average Manufacturer Price. Right now, pharmaceutical companies can manipulate the Average Manufacturer Price by including the price of both branded drugs and authorized generic drugs in the calculation. The bipartisan Fair and Accurate Medicaid Pricing (AMP) Act of 2019 would close that loophole by removing authorized generics, which are typically less expensive than brand drugs, from being used in the company's calculations. The bill is also cosponsored by Senators Debbie Stabenow (D-MI), John Cornyn (R-TX), Ben Cardin (D-MD), and Todd Young (R-IN).