CMS Final Rule on Covered Outpatient Drugs

The U.S. Centers for Medicare & Medicaid Services (CMS) recently issued a mammoth Covered Outpatient Drugs final rule (81 Fed. Reg. 5170, 2/1/16) “that addresses key areas of Medicaid drug reimbursement and changes made to the Medicaid Drug Rebate Program (MDRP) by the Affordable Care Act (Pub. L. No. 111-148, 3/23/10). The final rule assists states (including U.S. territories) and the federal government in managing drug costs, particularly by creating a regulatory definition for Average Manufacturer Price (the key metric for determining manufacturer rebates and pharmacy reimbursement for generic drugs subject to the FUL) and by updating the Federal Upper Limit (FUL) formula. The final rule also establishes sustainability of the MDRP, by providing “guidance necessary to ensure proper calculation and reporting of drug product and pricing information,” as well as creates a more equitable reimbursement system, by helping “to ensure that pharmacy reimbursement is aligned with the acquisition cost of drugs and that the states pay an appropriate professional dispensing fee.” Though issued as a final rule, CMS is still accepting comments on it until April 1, 2016. For additional information, see the 1/21/16 CMS Covered Outpatient Drugs Final Rule with Comment fact sheet.