The Medicaid Drug Rebate Program helps lower Medicaid spending on outpatient prescription drugs by ensuring states receive discounts similar to those provided to private purchasers. Based on manufacturer reported pricing data, Medicaid drug rebates generate significant revenue for the states (and the federal government) that helps offset Medicaid prescription drug expenditures. This publication describes the Medicaid Drug Rebate Program and reviews how it works.
Peters, Christie Provost, "The Medicaid Drug Rebate Program" (2009). National Health Policy Forum. Paper 223.