Press Releases

CMS Statement on Misclassification of Drugs, Program Administration and Program Integrity Updates Under the Medicaid Drug Rebate Program (MDRP) Proposed Rule (CMS-2434-P)

Today, the Centers for Medicare & Medicaid Services (CMS) is providing an update on CMS’ work related to the Misclassification of Drugs, Program Administration and Program Integrity Updates Under the Medicaid Drug Rebate Program proposed rule (CMS-2434-P). 

CMS received numerous inquiries and comments on the Misclassification of Drugs, Program Administration and Program Integrity Updates Under the Medicaid Drug Rebate Program (MDRP) proposed rule. The proposed rule includes policies to implement new statutory authorities included in the Medicaid Services Investment and Accountability Act of 2019 (MSIAA) to address situations in which manufacturers incorrectly report or misclassify their drugs in the MDRP. The proposed rule also seeks to enhance the MDRP integrity and improve program administration by proposing new policies that would assure greater consistency and accuracy of drug information reporting, strengthened data collection, and efficient operation of the MDRP.

As part of the proposed rule, CMS proposed revisions to the regulations for the determination of best price at § 447.505(d)(3) to make clearer that the manufacturer must adjust the best price for a drug for a rebate period if cumulative discounts, rebates, or other arrangements to best price eligible entities subsequently adjust the prices available from the manufacturer, and that those discounts, rebates, or other arrangements must be “stacked” for a single transaction to determine a final price realized by the manufacturer for a drug.

CMS received comments both supporting and opposing the proposed revisions to § 447.505(d)(3). While we are still working on finalizing other proposals in the rule, we wanted to convey that we are not finalizing the proposal regarding stacking at this time. Instead, we are going to pursue the collection of additional information from manufacturers related to best price stacking methodologies to better understand and inform future rulemaking. 

We are committed to continuing to work to improve the integrity and operation of the MDRP.