Medicaid Prescription Drug Rebate Equalization Act of 2007

Medicaid Prescription Drug Rebate Equalization Act of 2007 - Amends title XIX (Medicaid) of the Social Security Act to reduce the costs of prescription drugs for enrollees of Medicaid managed care organizations by extending to such organizations the discounts offered under fee-for-service Medicaid plans.

Requires the state contract with a Medicaid managed care organization to provide that: (1) payment for covered outpatient drugs dispensed to Medicaid-eligible individuals enrolled with the organization shall be subject to the same rebate as the state is subject to; and (2) the state shall allow the organization to collect such rebates from manufacturers.

Requires also that capitation rates paid to the organization be: (1) based on actual cost experience related to rebates; and (2) subject to the federal regulations requiring actuarially sound rates.