Blog Post

CMS Proposing Major Changes to Medicaid Drug Rebate Program

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While you were at a Memorial Day barbeque, the Centers for Medicare & Medicaid Services (“CMS”) proposed major changes to the Medicaid Drug Rebate Program (“MDRP”). 2023-10934.pdf ( Comments on the proposed rules are due July 25 but we recommend that you start working now.

The proposed rules are 187 pages and address drug misclassification and drug pricing and product data misreporting by pharmaceutical manufacturers. Also important for manufacturers, the rules propose program integrity and program administration changes, including limiting the time within which a manufacturer can initiate an audit of a State Medicaid Program’s drug utilization for purposes of Medicaid rebate obligations; clarifying requirements to accumulate or “stack” price concessions when a manufacturer determines best price; and providing for drug price verification and transparency through data collection.

Increased Transparency of Prescription Drug Costs

CMS is proposing to verify certain drug prices reported by manufacturers through an annual Medicaid Drug Price Verification Survey. According to CMS, verifying drug prices and publishing non-proprietary information about drug prices will increase public transparency for high-cost drugs allowing state Medicaid agencies to negotiate covered outpatient drug (“COD”) prices more effectively with manufacturers. This sounds eerily similar to the purposes behind a multitude of State drug pricing transparency programs.

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