Wednesday, February 1, 2012

AMP Proposed Rule – The Wait is Over

Insights from Katie Lapins, Principal, Government Pricing Specialists:

On Friday, January 27, 2012, CMS issued a Proposed Rule to implement the necessary provisions to the Medicaid Drug Rebate Program (MDRP) as a result of the Affordable Care Act (ACA) and other associated legislation dealing with healthcare reform. The Proposed Rule is on the GP Navigator is here.

IIR's GP Summit is the FIRST conference following the issue of the Proposed Rule and includes more speakers from CMS than any other event. This is the conference to attend to find out what the officials are saying as well as your peers within the industry.

Below are some items of interest after a first reading. As always, please remember that this does not constitute legal or management advice and all manufacturers should consult their own counsel and determine how to handle the items that are relevant to their specific organization, products, etc. It is certainly not comprehensive and will inevitably morph as we all re-read it and share our thoughts and interpretations.
  • → It is only a Proposed Rule which means nothing has changed.
  • → Pages 1 – 160 include many areas of discussion by CMS regarding their proposed changes; pages 161 – 200 include the actual Proposed Rule.
  • → Comments are due April 2, 2012.
  • → The definition of “States” and “United States” includes the 50 States, the District of Columbia, Puerto Rico and the U.S. Territories.
  • → The ACA listed specific fees that could be treated as “Bona Fide Fees for Service.” CMS has incorporated this language as examples into the criteria originally included under the Deficit Reduction Act (“DRA”).
  • → Line Extensions/New Formulations are broadly defined and CMS provides a table (Table 1) detailing those delivery forms that constitute “Oral Solid Dosage Forms.” Both the initial brand name drug and the line extension must be an oral solid dosage form to qualify for the Alternate Rebate/URA.
  • → With regards to the AMP calculation, CMS’s guidance is unclear with regards to the “inclusion” or “exclusion” methodology. (Read the discussion on Pages 46 – 49 for the actual, although vague, wording.)
  • → Retail community pharmacies are defined to include specialty pharmacies, home infusion centers and home healthcare providers.
  • → 5i products will be identified using the FDA’s Routes of Administration (Table 3) and AMP includes sales to those COTs included in non-5i products plus sales to physicians/outpatient facilities, PBMs, mail order, HMOs/MCOs, insurers, hospitals, long-term care providers, hospices and other manufacturers.
  • → 5i products will be determined using the VA 90/10 Rule and manufacturers will be required to review this monthly and quarterly.
  • → Orphan products voluntarily sold at 340B prices to new covered entities would not be excluded from a manufacturer’s Best Price.
  • → As with the DRA, manufacturers will be able to restate Base Date AMP within four quarters of the Final Rule if they have the actual/verifiable data to do so.
We invite you to join the Government Programs Summit this March 7-9, 2012 in Baltimore, MD! Download the brochure here for more information on this year's program and speakers.  If you have any questions about the program, please feel free to contact Jennifer Pereira at

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