![]() ![]() The terms of such arrangements can lead to significant variance in pricing at the per-patient level and potentially drop unit prices for certain patients below the best price traditionally offered for the drug product, leading to higher MDRP rebates. ![]() To date, the Medicaid best price implications of VBP arrangements represent a key challenge to their adoption. Manufacturers and payers increasingly are negotiating agreements to link a drug’s price to clinical outcomes or financial measures, especially for high-cost specialty drugs. An additional rebate is payable if the AMP of the product has increased faster than the Consumer Price Index (“CPI-U”). “Best price” is defined as the lowest net price at which the manufacturer sells the drug in the United States during the quarter. For single source and innovator multiple source drugs, the basic rebate is equal to the greater of either the difference between a drug’s quarterly Average Manufacturer Price (“AMP”) and the “best price” for the same period, or a flat percentage (23.1%) of the drug’s quarterly AMP. Under the MDRP, in order for a manufacturer’s drug products to be covered by state Medicaid programs, the manufacturer must agree to pay a rebate to the state’s Medicaid agency. On December 31, 2020, the Centers for Medicare & Medicaid Services (“CMS”) published in the Federal Register a final rule updating the Medicaid Drug Rebate Program (“MDRP”) regulations to, among other things, facilitate value-based purchasing (“VBP”) arrangements for prescription drugs, expand the universe of drugs that would be considered line extensions, and amend the MDRP’s treatment of manufacturer-sponsored copayment assistance programs. CMS Issues Final Rule Updating Medicaid Drug Rebate Program Regulations ![]()
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