Statement of Administration Policy: H.R. 2890 - Department of Veterans Affairs - Medicaid Drug Procurement Amendments of 1992

(House Floor)
(Montgomery (D) MS and 104 others)

The Administration has no objection to House passage of H.R. 2890, but will work in the Senate to ensure that the bill's costs are adequately offset.

The Administration continues to examine the effectiveness of the Medicaid drug rebate law and its impact on the drug prices paid by other Federal entities. Under a one-year moratorium included in the Department of Veterans Affairs (VA) FY 1992 appropriation language, VA drug prices were excluded from the drug price calculation used to determine what the Medicaid program should pay.

The Administration's preferred approach would be to simply make this exclusion permanent, as long as offsets are designated to meet the pay-as-you-go requirement. The Administration also would not oppose the extension of Medicaid best price exclusions to the other entities listed in H.R. 2890 if adequate offsets are included in the bill.

Although the bill contains offsets through increased Medicaid minimum rebates, it is not clear that H.R. 2890 is budget- neutral. Pay-as-you-go estimates for the bill are currently under development by the Office of Management and Budget.