The cost of birth control sold at student health centers on college campuses nationwide is increasing following a change in a Medicaid rebate law that reduced the incentive for pharmaceutical companies to provide large discounts on some drugs to universities, the AP/Houston Chronicle reports. About 39% of undergraduate women use oral contraceptives, according to an estimate by the American College Health Association based on survey data. The change in the Medicaid law was prompted by a 2005 deficit-reduction bill that focused on Medicaid, according to the AP/Chronicle. Pharmaceutical companies before the bill had sold drugs at reduced costs to colleges and some other health care providers. According to the AP/Chronicle, the discounts "made business sense" because they involved attracting new customers and did not count against the companies in a formula that calculated rebates owed to states for participating in Medicaid. Changes to the law made in the 2005 measure, which went into effect in January, resulted in drugmakers having pay more to participate in Medicaid, and fewer drug companies are now providing prescription drug discounts, according to the AP/Chronicle. Many colleges tried to maintain costs for contraceptives for a few months by buying in bulk before the new law took effect, but now their stocks are low and they have had to increase prices. In addition, many students are only now seeing the cost increase because they fill their prescriptions quarterly. Some experts said that many students could switch to a generic form of birth control but that they might still pay double the previous rate. ACHA said that CMS should have included college health centers to the providers who are exempt from the law, and the group has supported a proposal to change the law. A CMS spokesperson said the agency is reviewing that proposal (Pope, AP/Houston Chronicle, 3/23).

APM's "Marketplace" on Friday reported on the changes in contraceptive costs at colleges. The segment includes comments from Linda LaSalle, head of health education at Pennsylvania State University, and Mary Hoban of the American College Health Association (Palmer, "Marketplace," APM, 2/23). Audio and a transcript of the segment are available online.