CMS issues final rule for Medicaid drug rebates, reimbursement

The Centers for Medicare & Medicaid Services yesterday published its long-awaited final rule implementing Affordable Care Act changes to the Medicaid Drug Rebate Program and Medicaid reimbursement for covered outpatient drugs. According to CMS, the rule creates a regulatory definition for Average Manufacturer Price, the key metric for determining manufacturer rebates and pharmacy reimbursement for certain generic drugs in Medicaid. It also clarifies what constitutes a manufacturer’s “best price” and the definitions of “retail community pharmacy” and “wholesaler.” These definitions are important to calculating and reporting drug product and pricing information, and setting ceiling prices for the 340B Drug Pricing Program. The rule also codifies an ACA provision extending the Medicaid rebate to covered outpatient drugs provided to Medicaid managed care enrollees. CMS estimates the final rule, which takes effect April 1, will save the federal government and states an estimated $2.7 billion over five years. The rule will be published in the Feb. 1 Federal Register, with comments on certain provisions accepted for 60 days.