NCPA - National Center for Policy Analysis


November 25, 2008

Medicaid, already hurting from shrinking state budgets, has been ponying up quite a bit for drugs that were never approved by Food and Drug Administration (FDA), says the Wall Street Journal.

  • That's the finding of an investigation by the Associated Press (AP), which found that Medicaid paid nearly $198 million from 2004 to 2007 for more than 100 unapproved drugs.
  • The remedies were mostly for common ailments like colds and pain, and they date all the way back to before Congress decided in 1962 that the FDA had to review all new drugs.

So, why, after so many years, is this still an issue?  According to the AP:

  • The FDA hasn't compiled a master list of these medicines.
  • Some companies have argued that their drugs were grandfathered into compliance.
  • And Medicaid officials say the program is allowed to pay for unapproved drugs until the FDA has specifically ordered them off the market.

Sometimes, safety issues have come up.  For instance, the FDA banned injectable versions of a gout drug called colchicine after receiving 23 reports of deaths, the AP notes.

"I think this is something we ought to look at very hard, and we ought to fix it," Medicaid chief Herb Kuhn told the AP.  "It raises a whole set of questions, not only in terms of safety, but in the efficiency of the program -- to make sure we are getting the right set of services for beneficiaries."

Source: Sarah Rubenstein, "Medicaid Spent $200 Million on Unapproved Drugs," Wall Street Journal, November 24, 2008.

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