Medicaid Drug Rebate Program

The NavAxxess team has expertise in Health Systems Market Access Strategy and Mandated Rebate Contracting implications that may arise as a result of your participating in the Medicaid Drug Rebate Program Requirements.  These rules will affect the price the Medicaid program and 340B program will pay for your products.

On January 21, 2016 the Centers for Medicare and Medicaid Services released the Medicaid Drug Mandated Rebate and Reimbursement Rule.  This Rule clarifies the changes made to the Mandated Medicaid Drug Rebate Health Systems Program by the Affordable Care Act of 2010.  The Rule covers a broad range of topics of interest to manufacturers and there are certain provisions that are of particular interest to manufacturer that participates in the Mandated Medicaid Drug Rebate Program, most which have the potential to change your Best Price and impact your Medicaid liability and PHS pricing.  These has had a profound impact on Strategy for Health Systems.

Bona-fide service fees

  • The final rule indicates that administrative or service fees paid to any entity and Plans may be excluded from Best Price consideration if they meet the statutory definition of a Bona-fide service fee.
  • Have you implemented and documented contractual relationships with your customers and Market Access Health Systems where the price concessions offered can be classified as bona-fide service fees and not as discounts for purposes of your Best Price calculation?
  • What is your strategy related to Health Systems due to these changes?

Bundling and Discount Reallocation

  • The Final Rule requires that discounts in a bundled sale, including those discounts resulting from a contingent arrangement to Market Access Health Systems, are allocated proportionally to the total dollar value of the units of all drugs or products sold under the bundled arrangement for purposes of determining your AMP and Best Price.
  • Have you identified all situations where your Market Access Contracts have created a contingent arrangement that will require the regulatory reallocation of discounts?

5i AMP and Specialty Pharmacy Business Model Classification

  • The Final Rule established a new AMP calculation for “5i” Drugs. 5i drugs are defined as those for inhalation, infusion, instilled, implanted, or injection.  By establishing this definition, states can begin to collect rebates for these drugs.
  • Have you implemented an ongoing process to classify your current customers as retail or specialty for inclusion in the retail or 5i AMP calculation?

Discount Stacking Strategy

  • The Final Rule requires prices to be stacked for Best Price where multiple price concessions to two entities or Plans adjust prices to a single Health Plan Customer.
  • Have you implemented processes and procedures to identify all situations where a need to aggregate Mandated Market Access Discounts exists for determination of your Best Price?  And have those procedures clearly articulated how the requirement to aggregate Health Plans discounts may occur?  What is your Health Systems Strategy?

The U.S. Territories are now part of MDRP

  • Rule amends the definition of “states” to include the territories of Puerto Rico, Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands to allow them to begin collecting Market Access Medicaid Mandated Rebates effective April 1, 2017
  • Have you established pricing oversight strategies and operational methods to collect these transactions for inclusion in your Market Access Mandated price calculations?

Line Extensions

  • Alternative rebate calculation strategies required may impact total regulatory rebates paid to Government programs AND raise the net effective price to State Medicaid Health Systems on new products that are classified as Line Extension products
  • Have you determined how the “Federal offset” may impact the State’s financial value proposition for your product and impact their decision to include on their PDL?
  • NavAxxess Health Solutions has proven experience in helping companies to meet the new requirements of the Medicaid Drug Rebate and Reimbursement Rule and establishing Market Access Health System Strategies to address these emerging issues.