9 August 2018 - Drug companies will be unable to game a requirement to give states large prescription rebates through Medicaid under a law the Trump administration implemented Thursday.

The guidance closes a loophole that drug companies exploited by making superficial changes to existing drugs to inflate their costs and thus pay states less than they owed. The changes allowed drug companies to treat the medicines as new drugs and change the rebate calculation.

"This is the kind of abusive behavior from drug companies that this administration will not tolerate," said Health and Human Services Secretary Alex Azar in announcing the change at the American Legislative Exchange Council in New Orleans.

The rules around these types of drugs, known as "line extensions," were changed under legislation President Trump signed into law in February.

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