Department of Health

Medicaid Prescription Drug Rebates

The states can receive rebates from drug manufacturers for prescription drugs provided to Medicaid recipients. In audit report 2000-S-33, we examined the actions taken by the Department of Health in collecting such rebates and found that significant improvements were needed, as the Department was not properly tracking or pursuing the rebate revenue due from the manufacturers. As a result, during the 30 months covered by our audit, the Department had not recovered between $14.1 million and $19.6 million in rebate revenue that should have been recovered.

In this audit, we examined the progress made by the Department in improving its rebate collection efforts. We found that some improvements had been made. However, the Department had not fully implemented its new system for billing, tracking and accounting for rebates. We recommended the Department complete the implementation of this system without further delay. We also examined other actions taken by the Department to reduce the overall cost of Medicaid prescription drugs, which account for about 15 percent of New York State’s total Medicaid costs. We found that several cost-saving measures had been initiated by the Department. However, we could not fully evaluate the impact of these measures, because their implementation had been delayed.

For a complete copy of Report 2005-S-51 click here.
For a copy of the 90-day response click here.