Final Medicaid Best Price Changes Encourage Value Based Purchasing but Discourage Copay Assistance

January 5, 2021By Alan M. Kirschenbaum & Michelle L. Butler & Faraz Siddiqui

In the New Year’s Eve edition of the Federal Register, CMS published a final rule to implement statutory amendments to the Medicaid Rebate Program statute, and to add CMS’s own policy proposals to encourage value based purchasing arrangements and discourage patient copay assistance.  The variety of topics covered in this rule include:

  • Best price changes and other and other measures to encourage value based arrangements in Medicaid
  • New regulations to implement the alternative rebate for line extensions, including definitions of “new formulation” and “oral dosage form”
  • A new, difficult hurdle for claiming the best price exceptions for manufacturer coupon and other patient savings programs
  • Clarification of the average manufacturer price (AMP) and best price treatment of rebates to Medicaid Managed Care plans that are not pursuant to a CMS-approved supplemental rebate program.
  • Implementation of statutory amendments to exclude sales of authorized generics from the brand AMP, redefine single source and innovator source drugs to remove references to “original NDAs”; and redefine multiple source drugs to include OTC drugs that are covered outpatient drugs.

Hyman, Phelps & McNamara, P.C. has prepared a memo summarizing this wide-ranging final rule (available here).