Government strategies to control inflation

The House of Rothschild 50 years after the Bank of England opened it's doors, Amschel Moses Bauer, an 18th century German Jewish moneychanger and trader in silk cloth in the ghetto called "Judengasse" or Jew Alley in Frankfurt am Main, Germany, opened a coin shop a counting house in When his son 'Amschel Mayer Bauer' inherited the business, he decided to change his name to 'Rothschild'.

Government strategies to control inflation

Rising Medicaid spending on prescriptiondrugs has prompted many states to look for new ways to control such costs. What initiatives are states considering? In the early s, prescription management programs, which included preferred drug lists, supplemental rebates, and script limits, were implemented and expanded by states in an effort to control costs.

This issue brief provides a snapshot of current state initiatives aimed at addressing the cost of prescription drugs in Medicaid. How does Medicaid pay for prescription drugs? Under federal law, in order for a drug to qualify for federal statutory Medicaid matching funds, manufacturers must sign an agreement with the Secretary of Health and Human Services stating that they will rebate a specified portion of the Medicaid payment for the drug to the states, which in turn share the rebates with the federal government.

In return, Medicaid must cover almost all FDA-approved drugs that those manufacturers produce. The formula for the amount of the rebate is set in statute 7 and varies by type of drug brand or generic Figure 2. Rebates apply regardless of whether a state pays for prescription drugs on a fee-for-service basis or includes them in capitation payments to managed care plans.

As discussed in detail below, most states also negotiate supplemental rebates with manufacturers. Federal Medicaid Statutory Drug Rebates For Medicaid drugs provided on a fee-for-service basis, state payment includes both a dispensing fee amount paid to the pharmacy for the work of filling the prescription and payment for the ingredient cost amount paid to the pharmacy for the cost of the drug.

States have flexibility to set professional dispensing fees. These federal rules regarding allowable schedules do not apply to Medicaid drugs provided through managed care.

PBMs perform financial and clinical services for the program, administering rebates, monitoring utilization, and overseeing preferred drug lists. What policy levers have states traditionally used to control Medicaid drug spending? Within federal rules regarding the federal rebate agreement and medical necessity requirements, states have flexibility in administering their Medicaid prescription drug programs.

States have used a variety of strategies to contain pharmacy costs and have done so for many years. Common strategies include implementing prescription limits, negotiating supplemental rebates, requiring prior authorizations, and using state Maximum Allowable Cost MAC 13 programs.

States also have joined multi-state purchasing pools when negotiating supplemental Medicaid rebates to increase their negotiating power, and states have switched ingredient cost methodologies. A state may require a prior authorization for a drug not on a preferred drug list. Often, drugs on PDLs are cheaper or include drugs for which a manufacturer has provided supplemental rebates.

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While states may require prior authorization, restrict access to drugs only being used for medically accepted indications, or not cover certain specific drugs that are listed in the statute, outside of these allowances, they are required to provide nearly all prescribed drugs made by manufacturers that have entered into a rebate agreement.

States have used these strategies in Medicaid for many years Figure 3. However, such actions have slowed in recent years as economic conditions have improved and states reach the limits of utilization controls allowed under federal law Figure 4. Many of the traditional pharmacy cost containment tools have been in place for a number of years.

Over time, changes to the traditional pharmacy cost containment tools have decreased as such programs have matured. Sovaldi, a direct acting antiviral DAAwas a major advance in the treatment of hepatitis C HCV in that it essentially cures the disease in most people while causing minimal side effects.

Government strategies to control inflation

Previous treatments had been much less successful and had debilitating side effects. Even with the federally-required Medicaid rebate, Sovaldi remained expensive to Medicaid, and limited competition in the drug class made it difficult for states to initially use PDLs to obtain supplemental rebates.

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Because a disproportionate number of people with HCV are enrolled in public programs, Medicaid financed a large share of DAA treatment. However, these restrictions were inconsistent with treatment recommendations and with federal law about drug utilization control.

Class actions were filed in federal courts in a number of states, and in Maya federal court issued a preliminary injunction ordering Washington State to provide DAAs to all Medicaid beneficiaries with the virus.

Despite increased competition, 20 DAAs remain expensive, and states continue to grapple with the high cost of specialty drugs.

In addition, although states have placed particular focus on DAAs, they remain vigilant about other high cost drugs as well, such as hemophilia, oncology, and diabetes classes of drugs. What new Medicaid strategies are states trying to control drug spending?

Some new strategies that states are trying aim to expand the scope of efforts already underway in Medicaid or implement new Medicaid policies not previously allowed under federal law. In general, these efforts share a goal of obtaining greater supplemental rebates from manufacturers. Currently, states use placement on their PDL as a means to negotiate supplemental rebates.

States often join in multi-state pools to have greater leverage to obtain supplemental rebates.May 18,  · States, Not Just Feds, Struggle to Keep Gas Tax Revenue Flowing According to a Governing analysis, two-thirds of states' fuel taxes have failed to keep up with inflation.

The historical evidences have shown that price control alone cannot control inflation, but only reduces the extent of inflation. For example, at the time of wars, the government of different countries imposed price controls to prevent any further rise in the prices.

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Why and how does government attempt to control inflation? For hundreds of years before the 20th century the value of the pound had remained almost the same.

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CPI Home. The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. Indexes are available for the U.S.

and various geographic areas. Average price data for select utility, automotive fuel, and food items are also available. Research is central to the monetary policy framework. The Bank continues to broaden its research and analysis of structural and sectoral issues, while establishing research partnerships with outside institutions and individuals.

BOOK III. BEFORE speaking of the different forms of government, let us try to fix the exact sense of the word, which has not yet been very clearly explained.. 1. GOVERNMENT IN GENERAL. I WARN the reader that this chapter requires careful reading, and that I am unable to make myself clear to those who refuse to be attentive.

Every free action is produced by the concurrence of two causes; one.

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