State Budget Includes Medicaid Drug Expenditure Cap -

On April 20, 2017, New York Governor Andrew Cuomo signed into law certain cost-control measures that attempt to cap the state’s Medicaid drug spending, making New York the first state to pass such sweeping legislation. The law could have a significant impact on pharmaceutical manufacturers’ New York Medicaid rebate liability.

New York’s Fiscal Year 2018 budget includes a Medicaid drug expenditure cap provision that allows the state Department of Health (“DoH”) to (a) set an annual projected spending target for pharmaceuticals, and (b) demand additional rebates of drug manufacturers to meet that target.