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Penny-Wise Payment for Generics

Congress is cutting what the Medicaid program will pay pharmacies for generic prescriptions. Big chains warn that could mean they use brands more.

It sure seems like a funny way to try to save money on prescription drugs: try to cut spending on generics without touching what you spend on brands. But that is what Congress opted to do as part of a budget cutting measure affecting the Medicaid program that was signed into law February 8.

The new law will change how pharmacies are reimbursed for generic drugs by the state-administered Medicaid program. After extensive investigations by government agencies, Congress concluded that it was paying too...

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