Drug Discount Monitor

CMS Publishes Long-Awaited Medicaid AMP Proposed Rule

202-page document includes multiple references to 340B program.

January 30, 2012—The Centers for Medicare and Medicaid Services (CMS) has published its long-awaited proposed rule to implement the Medicaid average manufacturer price (AMP) and best price (BP) provisions of the Affordable Care Act (ACA).

Once finalized, the rule will have major implications for prices paid for 340B-discounted drugs. CMS is accepting comments on its proposal through April 2.

The 202-page proposal, released late on Jan. 27, contains multiple direct references to the 340B program, touching on such subjects as 340B drugs for Medicaid managed care patients, how manufacturers are to treat orphan drugs sold to new covered entities types for purposes of calculating Medicaid best price, exclusion from best price of certain nominal-price sales to providers that meet 340B criteria but are not enrolled, and state Medicaid reimbursement for 340B-purchased drugs.

Other features include:

• CMS proposes a new determination of AMP based on changes made by ACA.
• CMS proposes a definition of "retail community pharmacy," a redefinition of "covered outpatient drug," and clarifies other terms used in the determination of AMP.
• CMS describes the sales to entities that are to be included and excluded from AMP.
• Because ACA required AMP to be calculated for inhalation, infusion, instilled, implanted, or injectable drugs (the so-called "5i" drugs) that are not generally dispensed through a retail community pharmacy, CMS proposes a policy regarding the treatment of the these drugs.

The Monitor will report in greater depth on the proposed rule in the coming days.