KFF September 22, 2022
The recent passage of the Inflation Reduction Act of 2022 (IRA) includes a number of climate, tax, and health care provisions and prescription drug reforms. While the prescription drug reforms primarily apply to Medicare; some provisions interact with the Medicaid Drug Rebate Program (MDRP) and could increase overall Medicaid prescription drug spending. In FY 2020, Medicaid gross drug spending was $72 billion and $39 billion was offset by rebates, resulting in $33 billion of net spending that is shared by states and the federal government, accounting for approximately 5% of total Medicaid spending. Despite remaining stable from 2015 to 2019, Medicaid net spending on prescription drugs increased in 2020. Further, the onset of the COVID-19 pandemic has impacted prescription drug...
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