Medicaid, the joint state and federal program for low-income residents, also demands discounts. Medicaid discounts — 13 percent for generics — are calculated off the “average manufacturers’ price.” The AMP is similar to ASP but redefined as recently as 2010 for injectable drugs.
Nothing in the literature reviewed for this study suggested that health care providers who are experiencing shortages of injectable drugs blame Medicaid reimbursement for the crisis. It may be that they avoid seeing patients enrolled in Medicaid, which would be consistent with research, although it condemns those patients to poor quality health care. A recent study of five-year cancer survival rates for Ohio residents concluded that Medicaid patients experienced significantly worse outcomes, with a mortality rate half again as bad as the non-Medicaid population. A large and growing body of evidence indicates that physicians limit their availability to Medicaid dependents.
It is not clear, however, that this contributes to drugmakers’ cutting off supply. As in the 340B program, government intervention takes the form of dictated discounts, not nominal prices. So drugmakers could respond by increasing prices to private payers.