Medicaid Rebate Agreement

2020 December 12

Discount periods account for a quarter of the year, allowing the discount to be adjusted up to four times a year. Answer: We agree with the commentator that rebates negotiated under a public pharmaceutical program are not subject to the rebate rules. We believe that the printing beginning of page 12775Langue of Section II., “Manufacturer`s Responsibility,” these guarantees, when it provides that “the Secretary`s order to authorize a state to receive payment of the manufacturer`s drugs under Title XIX of the Act, 42 U.S.C sections 1396 and following, the manufacturer accepts the requirements implemented by 42 CFR 447.510.” Therefore, if a manufacturer receives a request for payment under this agreement, which it does not believe, is charged under Medicaid, we recommend that the manufacturer contact the state for clarification. (e) Non-renewal or termination does not affect rebates due before the effective date of termination. Because MDRP is a complex program that has developed over time, it contains some technical problems and provisions that reduce the amount of the rebate for certain drugs. Policymakers are considering several changes to address these issues and increase the effective amount of rebates. While these amendments would save both the federal and the state government savings, the power to implement them is at the federal level, since the MDRP is enshrined in federal law. As with most health programs, the MDRP has countless concepts and rules. Program requirements, particularly the minimum rebate, have changed over the years, including the 2010 Affordable Care Act (ACA). One of the proposed approaches is to remove the rebate cap, which currently represents 100% of TMPs. As a result of rising prices over time, a number of drugs have reached the discount cap. Increasing or removing the cap would save money for the program and reduce revenue for drug manufacturers.39 The Medicaid and CHIP Payment and Advisory Commission (MACPAC) recommended the total removal of the cap.40 A multi-party drug treatment bill, passed by the Senate Finance Committee, contains a provision to increase the ceiling to 125 percent of the GPA.

The requirement to mix the price of licensed generic drugs with the GPA of brand name drugs is another provision that appears to have unintentionally created a loophole. According to the Medicaid and CHIP Payment Advisory Commission (MACPAC), Congress had no intention of authorizing the sale of an authorized generic drug in order to reduce a drug`s MPA and thus reduce its mandatory rebate. Macpac notes that the allocation is the result of two amendments that are contained in separate legislation at five years each other: the Deficit Reduction Act 2005 required the mixing of the brand name drug`s GPA with an approved generic drug, while the ACA added a wholesaler definition to include a producer working in the wholesale trade. Macpac recommends that Congress refrain from this practice, which allows for reductions. [xxiv] Comment: One commentator accepted the proposed definition of “unit discount” as “the calculated amount on which state data on drug use by states that charge the producer the payment of the rebate due” is applied, but accepted an additional text to the CMS indicating CMS`s long-standing position that manufacturers are solely responsible for calculating the ARU required to pay a rebate.

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