Questcor Pharmaceuticals (NASDAQ:QCOR) announced this morning that it can now start making money on the prescriptions of H.P. Acthar Gel that the company sells to Medicaid patients. QCOR has been providing Acthar to Medicaid participants, but the company has been paying mandatory rebates to state Medicaid programs, which have amounted to 100% of what the company sells the product to its distributor. As a result, QCOR was making no money on those prescriptions. The Centers for Medicare and Medicaid (CMS) has just informed the company that the rebate on Acthar Gel is eligible for a substantial reduction, and QCOR estimates that the new rebate could drop from 100% to approximately 23.1% of the current selling price. The company stated that it may take roughly 3 to 6 months to implement the rebate change, but once in place, the change could have a “materially positive impact” on its financial results. A substantial number of patients that receive Acthar Gel are Medicaid patients (as few as 5-10% in some indications, but as much as 50% in others), hence, making money on Medicaid-based prescriptions should provide a big boost to profits over time. QCOR is up over 8% in pre-market trading, and with more than 43% of shares short, a squeeze is likely to boost the shares further after the open. QCOR is still a long ways off from its 52-week high of ~$59 per share, therefore, the stock has room to run beyond pre-market indications.