Federal Government Denies a Massachusetts Proposal for Closed Formulary

The Center for Medicare and Medicaid Services (CMS) said that it will not approve a request from Massachusetts for a closed formulary unless other plans are made first. While the Federal Government recognized the desire to lower drug costs, the State of Massachusetts would have to figure out how rebates would work under a new model first before given a waiver to negotiate their own discounts. 

Massachusetts requested what is known as a 1115 Waiver, which would allow them to avoid certain Medicaid rules- basically giving them the power to negotiate discounts for the drugs they purchase under Medicaid, and exclude other drugs that may be of lower treatment value. However, state Medicaid programs are required to cover all FDA approved drugs. This would have been the first Waiver to give this type of power to a state Medicaid program.