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Comment Letter: Proposed Rule on Medicaid Program; Misclassification of Drugs, Program Administration and Program Integrity Updates Under the Medicaid Drug Rebate Program

In a letter to Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure, MACPAC commented on a proposed CMS rule which aims to clarify definitions, enhance price transparency, and address drug misclassification under the Medicaid Drug Rebate Program (MDRP).

The Commission applauds CMS’s efforts to establish a process for identifying, notifying, and correcting drug misclassifications while cautioning against drug suspension from the MDRP due to potential negative impacts on beneficiaries’ access to essential medications. Overall, the Commission supports the objectives of the proposed rule to ensure the rebates provided under the MDRP are calculated appropriately and collected in a timely manner.

Additionally, the Commission generally supports efforts that could help states better understand and negotiate drug prices such as the drug price verification survey. However, the Commission had technical comments on CMS’s proposed methodology to exclude certain products from the survey based on a manufacturer’s willingness to negotiate further rebates. The Commission noted that a drug with a higher than average total rebate percentage is not necessarily reflective of a manufacturer’s willingness to negotiate and may be more attributable to price increases over time. The extent to which the supplemental rebate increases the total rebate beyond the statutory rebate amount may be a more reflective measure of a manufacturer’s willingness to negotiate.

Lastly, the Commission emphasized potential data anomalies in the CMS-64 financial management reports due to timing discrepancies in drug expenditures and rebates and prior period adjustments. These discrepancies could lead to misaligned gross spending and rebate figures for a particular time period, which would skew the total rebate percentage that is used to identify drugs for exclusion. The Commission urged CMS to be vigilant about identifying and addressing potential data issues within the CMS-64 data.