Branded Prescription Drug Fee Program Communication

Dear Manufacturer Technical and Invoice Contacts,

Section 9008 of the Affordable Care Act (ACA) established the Branded Prescription Drug Fee (BPD) Program, in which Medicaid and the other specified government drug programs (Medicare Part B, Medicare Part D, TRICARE, Department of Veterans Affairs (VA), and the Department of Defense (DOD)), are required to report annual drug sales information to the Department of Treasury.  In order for Medicaid to accurately calculate the Medicaid sales dollars, it is imperative that the product data (e.g., Average Manufacturer Price (AMP), Unit Rebate Amount (URA)), and state drug utilization data (SDUD) reported in the Medicaid Drug Program system (MDP) be correct and up-to-date.

It is the expectation that Manufacturers routinely monitor MDP product (e.g., drug category, product termination date, etc.) and pricing (e.g., AMP, BP) to ensure accuracy.  Additionally, manufacturers should verify correctness of SDUD units and reimbursement amounts reported to CMS in comparison to their state rebate invoices.  If a manufacturer has reached agreement on an adjustment and/or dispute with a state and that agreement is not reflected in MDP by the due date of the next quarterly data transmission from the state, the manufacturer should contact the state to confirm that the adjusted data has been reported to CMS.

The next annual fee calculation will use the data submitted by states for all quarters in 2024.  If there are differences between quarterly rebate invoices and the state-reported utilization data (units/reimbursement amounts) in MDP for the same quarter in 2024, we request that a manufacturer contact the appropriate state’s Technical Contact (copying CMS at MedicaidBPD@cms.hhs.gov) regarding the difference.  A list of State Technical Contacts can be found at https://www.medicaid.gov/medicaid/prescription-drugs/medicaid-drug-rebate-program.

Note: We have sent this information to the Manufacturers’ Technical and Invoice Contacts for the Medicaid Drug Rebate Program (MDRP).  If you are not your company’s contact for the branded prescription drug fee (BPD) program, please forward to your company’s BPD contact, and be aware that he/she may need your assistance using/interpreting the rebate data being used for the annual sales fee to more effectively evaluate whether disputes are warranted, and how to present the data in such instances.

Thank you for your cooperation with this effort. If you have any questions, please feel free to contact us via this email resource box, MedicaidBPD@cms.hhs.gov.

Sincerely,

CMS Medicaid BPD Team

Dear State Technical and Rebate Contacts,

State Drug Utilization Data (SDUD) continue to be used as part of the methodology for establishing an annual fee on branded prescription drug manufacturers that was enacted by section 9008 of the Affordable Care Act (ACA).  While the Department of Treasury is responsible for imposing these fees, the government drug programs specified in section 9008 (Medicaid, Medicare Part B, Medicare Part D, TRICARE, Department of Veterans Affairs (VA), and the Department of Defense (DOD)) are required to report drug sales information to the Department of Treasury each year so that the fees can be accurately calculated.

For purposes of the Medicaid data, CMS does not want to impose a new reporting requirement on the states as part of this process; therefore, the SDUD that are currently reported under section 1927(b)(2)(A) of the Social Security Act (the Act) are being provided to the Department of Treasury as one element of Medicaid’s drug sales information.  If a state has not reported its SDUD, these new fees cannot be appropriately calculated; therefore, timely and complete SDUD reporting is essential to this process.  In accordance with section 1927(b)(2)(A) of the Act, states are required to submit all Medicaid SDUD, including physician administered drug utilization and managed care organization (MCO) drug utilization, to CMS within 60 days of the end of each quarter.

Additionally, many states are not applying necessary drug unit conversion factors prior to billing the labeler correctly. Since all Medicaid pharmacy programs are required to invoice for drug rebates for covered outpatient drugs (COD) reimbursed via the pharmacy and medical benefit, this may result in differences between provider billed units (National Council for Prescription Drug Programs (NCPDP) units for pharmacy claims or Healthcare Common Procedure Coding System (HCPCS) units for medical claims) and CMS rebate units.

Please review the SDUD that has been submitted for calendar year 2024 to determine whether any additional submissions or corrections are necessary. MDP supports edits either on-line or via direct file upload any time during the quarter.

All 2024 SDUD corrections should be submitted into MDP, and verified/certified by COB December 30, 2025, in order to be included in the December 31st BPD Data snapshot.

States that fail to update or correct overstated or understated SDUD reported to CMS, may result in compliance action being taken to recover the amount the erroneous data submission caused to be calculated or omitted from the calculation of sales owed to the federal government under the branded prescription drug fee program.

Thank you for your cooperation with this effort. If you have any questions, please feel free to contact us via this email resource box, MedicaidBPD@cms.hhs.gov.

Sincerely,

CMS Medicaid BPD Team

Dear State Technical and Rebate Contacts,

This is a follow-up to the July 16, 2024 email reminder to states regarding preparation for the upcoming 2025 Branded Prescription Drug (BPD) Fee Year using 2023 data.

Reporting of State Drug Utilization Data for Branded Drug Fee Calculation

In accordance with section 1927(b)(2)(A) of the Social Security Act (the Act), States are required to submit all Medicaid State Drug Utilization Data (SDUD), including physician administered drug utilization and managed care organization (MCO) drug utilization, to CMS within 60 days of the end of each quarter.  

SDUD continues to be used as part of the methodology for establishing an annual fee on branded prescription drug manufacturers that was enacted by section 9008 of the Affordable Care Act on March 23, 2010. While the Department of Treasury is responsible for imposing these fees, the government drug programs specified in section 9008 (e.g., Medicaid, Medicare Part B, and Medicare Part D, Department of Veteran Affairs (VA), the Department of Defense (DOD) and TRICARE) are required to report drug sales information to the Department of the Treasury each year so that the fees can be accurately calculated.  For purposes of the Medicaid data, CMS does not want to impose a new reporting requirement on the states as part of this process; therefore, the SDUD that are currently reported under section 1927(b)(2)(A) of the Act are being provided to the Department of Treasury as one element of Medicaid’s drug sales information.  However, if a state has not reported its utilization data, these new fees cannot be appropriately calculated; therefore, timely and complete reporting of SDUD is essential to this process.  

Importance of Submitting Correct Data

Over the past few years, it has come to our attention that some states are not submitting the same utilization on the rebate invoice to the manufacturer as are being reported to CMS.  In many such cases, it appears the state is either applying different edits to the individual rebate invoice than they do to the quarterly utilization file they send to CMS.  Additionally, not all states are applying necessary unit conversion factors prior to billing the manufacturer correctly, and are submitting these erroneous utilization to CMS, causing disputes on the calculated BPD fee.  Note: A unit conversion file (created and maintained by North Dakota) is posted to our Dispute Resolution Program (DRP) Medicaid.gov page, under DRP Resources:  https://www.medicaid.gov/medicaid/prescription-drugs/medicaid-drug-rebate-program/medicaid-drug-rebate-program-dispute-resolution).  Such states are not in compliance with their SDUD reporting requirements.

It is imperative that states and manufacturers work together to correct these data inconsistencies. Please note that if states fail to update or correct overstated or understated state utilization data reported to CMS, it may result in some manufacturers being assessed higher or lower fees than would have otherwise been the case.  For additional information, please refer to State Release No’s 163 & 166 located on Medicaid.gov at https://www.medicaid.gov/medicaid/prescription-drugs/program-releases or the BPD webpage: https://www.medicaid.gov/medicaid/prescription-drugs/branded-prescription-drug-fee-program/index.html.

We will be reviewing your state’s utilization file submissions for all quarters of 2023 to ensure that CMS has received the data, and that the state has responded to any corresponding utilization emails from either the manufacturers or CMS.  Please review the SDUD that has been submitted for 2023 to determine whether any additional submissions or corrections are necessary.  If so, please be aware that with MDP, you are able to perform edits either on-line or via direct file upload into MDP.  These enhancements reduce the barriers to adjusting any of the SDUD.  All updates need to be entered into MDP by COB December 30, 2024 in order to be included in the December 31st BPD Data snapshot.

Thank you for your cooperation with this effort.  If you have any questions, please feel free to contact us via this email resource box, MedicaidBPD@cms.hhs.gov.

Sincerely,
CMS Medicaid BPD Team
 

Dear Manufacturer Technical and Invoice Contacts,

This is a follow-up to the July 16, 2024 email reminder to manufacturers regarding preparation for the upcoming 2025 Branded Prescription Drug (BPD) Fee Year using 2023 data.

Reporting of State Drug Utilization Data for Branded Drug Fee Calculation

In accordance with Section 1927(b)(2)(A) of the Social Security Act (the Act), States are required to submit drug rebate utilization data to CMS within 60 days of the end of each quarter.  Consistent with the Branded Prescription Drug program in the Affordable Care Act, State Drug Utilization Data (SDUD) continue to be used as part of the methodology for calculating an annual fee on branded prescription drug manufacturers and importers.  In general, the government drug programs specified in section 9008 (e.g., Medicaid, Medicare Part B and Medicare Part D, Department of Veteran Affairs (VA), the Department of Defense (DOD) and TRICARE) are required to report drug sales information to the Department of Treasury each year so that the fees can be accurately calculated.  As a result, the accuracy of the SDUD is essential to ensuring that Medicaid’s drug sales information is reported correctly to the Department of Treasury.

Importance of Submitting Correct Data

Manufacturers are encouraged to review utilization data in MDP to ensure that state utilization data reported to CMS are accurate as compared to the state rebate invoices received by manufacturers (Note: The Medicaid state utilization data reported to CMS and posted in MDP does not reflect State-only and/or State Pharmacy Assistance Program units; therefore, please do not consider these types of units when performing your review).  When preparing quarterly invoices, there may have been some differences in the unit standards used by the MDRP compared to those used by pharmacies.  In those instances where the reimbursement unit standard used by pharmacies may be different from the rebate unit standard, appropriate conversion factors may be necessary prior to invoicing labelers.  We have noticed that some manufacturers are repeatedly neglecting to apply the necessary conversion factors from quarter to quarter, often resulting in grossly overstated or understated rebate amounts, creating similar types of BPD disputes across numerous states.  A unit conversion file (created and maintained by North Dakota) is posted to our Dispute Resolution Program (DRP) Medicaid.gov page, under DRP Resources:  https://www.medicaid.gov/medicaid/prescription-drugs/medicaid-drug-rebate-program/medicaid-drug-rebate-program-dispute-resolution).

Manufacturers need to correct existing issues from previous years so the same BPD disputes are not submitted each year.  It is imperative that states and manufacturers work together to correct these data inconsistencies. The next annual fee calculation will use the data submitted by states for all quarters in 2023.  If there are differences between quarterly rebate invoices and the state-reported utilization data in MDP for the same quarter in 2023, we request that a manufacturer contact the appropriate state’s Technical Contact (copying CMS at MedicaidBPD@cms.hhs.gov) regarding the difference.  A list of state Technical Contacts can be found at https://www.medicaid.gov/medicaid/prescription-drugs/medicaid-drug-rebate-program.  If a discrepancy is found, states can resubmit utilization data with corrected units to CMS, leveraging the file upload functionality in the MDP system.  In addition to such utilization adjustments, states are also required to update utilization based on agreed-upon rebate dispute resolutions and conversion adjustments.  If a manufacturer has reached agreement on an adjustment and/or dispute with a state and that agreement isn’t reflected in MDP by the due date of the next quarterly data transmission from the state, the manufacturer should contact the state to confirm that the adjusted data has been reported to CMS.

Since the CMS State Drug Utilization Data File is being used, in part, to determine the branded prescription drug fee, if the data are understated or overstated, then the fee could also be understated or overstated.  CMS encourages manufacturers to contact states, giving priority to significant disparities in utilization to help ensure accuracy in the calculation of the annual fee.  For additional information, please refer to Manufacturer Release No’s 89 & 92 located on Medicaid.gov at https://www.medicaid.gov/medicaid/prescription-drugs/program-releases or the BPD webpage at: 
https://www.medicaid.gov/medicaid/prescription-drugs/branded-prescription-drug-fee-program.

Note: We have sent this information to the Manufacturers’ Technical and Invoice Contacts for the Medicaid Drug Rebate Program (MDRP).  If you are not your company’s contact for the branded prescription drug fee (BPD) program, please forward to your company’s BPD contact, and be aware that they may need your assistance using/interpreting the rebate data being used for the annual sales fee to more effectively evaluate whether disputes are warranted, and how to present the data in such instances. 
We appreciate the efforts put forward by the majority of our manufacturer stakeholders to ensure the accuracy of the data reported and in communicating with states and CMS to prevent disputes.  If you have any questions, please feel free to contact us via this email resource box, MedicaidBPD@cms.hhs.gov.

Sincerely,
CMS Medicaid BPD Team

Dear Manufacturer Technical and Invoice Contacts,

Section 9008 of the Affordable Care Act (ACA) established the Branded Prescription Drug Fee (BPD) Program, in which Medicaid and the other specified government drug programs (Medicare Part B, Medicare Part D, TRICARE, Department of Veterans Affairs (VA), and the Department of Defense (DOD)), are required to report annual drug sales information to the Department of Treasury.  In order for Medicaid to accurately calculate the Medicaid sales dollars, it is imperative that the product data (e.g., Average Manufacturer Price (AMP), Unit Rebate Amount (URA)), and state drug utilization data (SDUD) reported in the Medicaid Drug Program system (MDP) be correct and up-to-date.

It is the expectation that Manufacturers routinely monitor MDP product (e.g., drug category, product termination date, etc.) and pricing (e.g., AMP, BP) to ensure accuracy.  Additionally, manufacturers should verify correctness of SDUD units and reimbursement amounts reported to CMS in comparison to their state rebate invoices.  If a manufacturer has reached agreement on an adjustment and/or dispute with a state and that agreement is not reflected in MDP by the due date of the next quarterly data transmission from the state, the manufacturer should contact the state to confirm that the adjusted data has been reported to CMS.

The next annual fee calculation will use the data submitted by states for all quarters in 2023.  If there are differences between quarterly rebate invoices and the state-reported utilization data (units/reimbursement amounts) in MDP for the same quarter in 2023, we request that a manufacturer contact the appropriate state’s Technical Contact (copying CMS at MedicaidBPD@cms.hhs.gov) regarding the difference.  A list of state Technical Contacts can be found at https://www.medicaid.gov/medicaid/prescription-drugs/medicaid-drug-rebate-program.

Note: We have sent this information to the Manufacturers’ Technical and Invoice Contacts for the Medicaid Drug Rebate Program (MDRP).  If you are not your company’s contact for the branded prescription drug fee (BPD) program, please forward to your company’s BPD contact, and be aware that he/she may need your assistance using/interpreting the rebate data being used for the annual sales fee to more effectively evaluate whether disputes are warranted, and how to present the data in such instances.

Thank you for your cooperation with this effort.  If you have any questions, please feel free to contact us via this email resource box, MedicaidBPD@cms.hhs.gov.

Sincerely,

CMS Medicaid BPD Team

Dear State Technical and Rebate Contacts,

State Drug Utilization Data (SDUD) continue to be used as part of the methodology for establishing an annual fee on branded prescription drug manufacturers that was enacted by section 9008 of the Affordable Care Act (ACA).  While the Department of Treasury is responsible for imposing these fees, the government drug programs specified in section 9008 (Medicaid, Medicare Part B, Medicare Part D, TRICARE, Department of Veterans Affairs (VA), and the Department of Defense (DOD)) are required to report drug sales information to the Department of Treasury each year so that the fees can be accurately calculated. 

For purposes of the Medicaid data, CMS does not want to impose a new reporting requirement on the states as part of this process; therefore, the SDUD that are currently reported under section 1927(b)(2)(A) of the Social Security Act (the Act) are being provided to the Department of Treasury as one element of Medicaid’s drug sales information.  If a state has not reported its SDUD, these new fees cannot be appropriately calculated; therefore, timely and complete SDUD reporting is essential to this process.  In accordance with section 1927(b)(2)(A) of the Act, states are required to submit all Medicaid SDUD, including physician administered drug utilization and managed care organization (MCO) drug utilization, to CMS within 60 days of the end of each quarter.

Additionally, many states are not applying necessary drug unit conversion factors prior to billing the labeler correctly. Since all Medicaid pharmacy programs are required to invoice for drug rebates for covered outpatient drugs (COD) reimbursed via the pharmacy and medical benefit, this may result in differences between provider billed units (National Council for Prescription Drug Programs (NCPDP) units for pharmacy claims or Healthcare Common Procedure Coding System (HCPCS) units for medical claims) and CMS rebate units.

Please review the SDUD that has been submitted for calendar year 2023 to determine whether any additional submissions or corrections are necessary.  MDP supports edits either on-line or via direct file upload any time during the quarter. 

All 2023 SDUD corrections should be submitted into MDP, and verified/certified by COB December 30, 2024, in order to be included in the December 31st BPD Data snapshot.

States that fail to update or correct overstated or understated SDUD reported to CMS, may result in compliance action being taken to recover the amount the erroneous data submission caused to be calculated or omitted from the calculation of sales owed to the federal government under the branded prescription drug fee program.

Thank you for your cooperation with this effort.  If you have any questions, please feel free to contact us via this email resource box, MedicaidBPD@cms.hhs.gov.

Sincerely,

CMS Medicaid BPD Team

Dear Manufacturer Technical and Invoice Contacts,

This is a follow-up to the May 10, 2023 email reminder to manufacturers regarding preparation for the upcoming 2022 Branded Prescription Drug (BPD) Fee Year.  

Reporting of State Drug Utilization Data for Branded Drug Fee Calculation

In accordance with Section 1927(b)(2)(A) of the Social Security Act (the Act), States are required to submit drug rebate utilization data to CMS within 60 days of the end of each quarter.  Consistent with the Branded Prescription Drug program in the Affordable Care Act, State Drug Utilization Data (SDUD) continue to be used as part of the methodology for calculating an annual fee on branded prescription drug manufacturers and importers.  In general, the government drug programs specified in section 9008 (e.g., Medicaid, Medicare Part B and Medicare Part D, Department of Veteran Affairs (VA), the Department of Defense (DOD) and TRICARE) are required to report drug sales information to the Department of Treasury each year so that the fees can be accurately calculated.  As a result, the accuracy of the SDUD is essential to ensuring that Medicaid’s drug sales information is reported correctly to the Department of Treasury.  

Importance of Submitting Correct Data

Manufacturers are encouraged to review utilization data in MDP to ensure that state utilization data reported to CMS are accurate as compared to the state rebate invoices received by manufacturers (Note: The Medicaid state utilization data reported to CMS and posted in MDP does not reflect State-only and/or State Pharmacy Assistance Program units; therefore, please do not consider these types of units when performing your review).  When preparing quarterly invoices, there may have been some differences in the unit standards used by the MDRP compared to those used by pharmacies.  In those instances where the reimbursement unit standard used by pharmacies may be different from the rebate unit standard, appropriate conversion factors may be necessary prior to invoicing labelers.  We have noticed that some manufacturers are repeatedly neglecting to apply the necessary conversion factors from quarter to quarter, often resulting in grossly overstated or understated rebate amounts, creating similar types of BPD disputes across numerous states.  A unit conversion file (created and maintained by North Dakota) is posted to our Dispute Resolution Program (DRP) Medicaid.gov page, under DRP Resources:  https://www.medicaid.gov/medicaid/prescription-drugs/medicaid-drug-rebate-program/medicaid-drug-rebate-program-dispute-resolution/index.html).

Manufacturers need to correct existing issues from previous years so the same BPD disputes are not submitted each year.  It is imperative that states and manufacturers work together to correct these data inconsistencies. The next annual fee calculation will use the data submitted by states for all quarters in 2022.  If there are differences between quarterly rebate invoices and the state-reported utilization data in MDP for the same quarter in 2022, we request that a manufacturer contact the appropriate state’s Technical Contact (copying CMS at MedicaidBPD@cms.hhs.gov) regarding the difference.  A list of state Technical Contacts can be found at https://www.medicaid.gov/medicaid/prescription-drugs/medicaid-drug-rebate-program/index.html.  If a discrepancy is found, states can resubmit utilization data with corrected units to CMS, leveraging the file upload functionality in the MDP system.  In addition to such utilization adjustments, states are also required to update utilization based on agreed-upon rebate dispute resolutions and conversion adjustments.  If a manufacturer has reached agreement on an adjustment and/or dispute with a state and that agreement isn’t reflected in MDP by the due date of the next quarterly data transmission from the state, the manufacturer should contact the state to confirm that the adjusted data has been reported to CMS.

Since the CMS State Drug Utilization Data File is being used, in part, to determine the branded prescription drug fee, if the data are understated or overstated, then the fee could also be understated or overstated.  CMS encourages manufacturers to contact states, giving priority to significant disparities in utilization to help ensure accuracy in the calculation of the annual fee.  For additional information, please refer to Manufacturer Release No’s 89 & 92 located on Medicaid.gov at https://www.medicaid.gov/medicaid/prescription-drugs/program-releases or the BPD webpage at: 
https://www.medicaid.gov/medicaid/prescription-drugs/branded-prescription-drug-fee-program.

Note: We have sent this information to the Manufacturers’ Technical and Invoice Contacts for the Medicaid Drug Rebate Program (MDRP).  If you are not your company’s contact for the branded prescription drug fee (BPD) program, please forward to your company’s BPD contact, and be aware that they may need your assistance using/interpreting the rebate data being used for the annual sales fee to more effectively evaluate whether disputes are warranted, and how to present the data in such instances. 
We appreciate the efforts put forward by the majority of our manufacturer stakeholders to ensure the accuracy of the data reported and in communicating with states and CMS to prevent disputes.  If you have any questions, please feel free to contact us via this email resource box, MedicaidBPD@cms.hhs.gov.

Sincerely,

CMS Medicaid BPD Team

Dear State Technical and Rebate Contacts,

This is a follow-up to the May 10, 2023 email reminder to states regarding preparation for the upcoming 2022 Branded Prescription Drug (BPD) Fee Year.  

Reporting of State Drug Utilization Data for Branded Drug Fee Calculation

In accordance with section 1927(b)(2)(A) of the Social Security Act (the Act), States are required to submit all Medicaid State Drug Utilization Data (SDUD), including physician administered drug utilization and managed care organization (MCO) drug utilization, to CMS within 60 days of the end of each quarter.  

SDUD continues to be used as part of the methodology for establishing an annual fee on branded prescription drug manufacturers that was enacted by section 9008 of the Affordable Care Act on March 23, 2010. While the Department of Treasury is responsible for imposing these fees, the government drug programs specified in section 9008 (e.g., Medicaid, Medicare Part B, and Medicare Part D, Department of Veteran Affairs (VA), the Department of Defense (DOD) and TRICARE) are required to report drug sales information to the Department of the Treasury each year so that the fees can be accurately calculated.  For purposes of the Medicaid data, CMS does not want to impose a new reporting requirement on the states as part of this process; therefore, the SDUD that are currently reported under section 1927(b)(2)(A) of the Act are being provided to the Department of Treasury as one element of Medicaid’s drug sales information.  However, if a state has not reported its utilization data, these new fees cannot be appropriately calculated; therefore, timely and complete reporting of SDUD is essential to this process.  

Importance of Submitting Correct Data

Over the past few years, it has come to our attention that some states are not submitting the same utilization on the rebate invoice to the manufacturer as are being reported to CMS.  In many such cases, it appears the state is either applying different edits to the individual rebate invoice than they do to the quarterly utilization file they send to CMS.  Additionally, not all states are applying necessary unit conversion factors prior to billing the manufacturer correctly, and are submitting these erroneous utilization to CMS, causing disputes on the calculated BPD fee.  Note: A unit conversion file (created and maintained by North Dakota) is posted to our Dispute Resolution Program (DRP) Medicaid.gov page, under DRP Resources:  https://www.medicaid.gov/medicaid/prescription-drugs/medicaid-drug-rebate-program/medicaid-drug-rebate-program-dispute-resolution).  Such states are not in compliance with their SDUD reporting requirements.

It is imperative that states and manufacturers work together to correct these data inconsistencies. Please note that if states fail to update or correct overstated or understated state utilization data reported to CMS, it may result in some manufacturers being assessed higher or lower fees than would have otherwise been the case.  For additional information, please refer to State Release No’s 163 & 166 located on Medicaid.gov at https://www.medicaid.gov/medicaid/prescription-drugs/program-releases or the BPD webpage: https://www.medicaid.gov/medicaid/prescription-drugs/branded-prescription-drug-fee-program.

We will be reviewing your state’s utilization file submissions for all quarters of 2021 to ensure that CMS has received the data, and that the state has responded to any corresponding utilization emails from either the manufacturers or CMS.  Please review the SDUD that has been submitted for 2022 to determine whether any additional submissions or corrections are necessary.  If so, please be aware that with MDP, you are able to perform edits either on-line or via direct file upload into MDP.  These enhancements reduce the barriers to adjusting any of the SDUD.  All updates need to be entered into MDP by COB December 28, 2023 in order to be included in the December 29th BPD Data snapshot.

Thank you for your cooperation with this effort.  If you have any questions, please feel free to contact us via this email resource box, MedicaidBPD@cms.hhs.gov.

Sincerely,

CMS Medicaid BPD Team

Dear Manufacturer Technical and Invoice Contacts,

Section 9008 of the Affordable Care Act (ACA) established the Branded Prescription Drug Fee (BPD) Program, in which Medicaid and the other specified government drug programs (Medicare Part B, Medicare Part D, TRICARE, Department of Veterans Affairs (VA), and the Department of Defense (DOD)), are required to report annual drug sales information to the Department of Treasury.  In order for Medicaid to accurately calculate the Medicaid sales dollars, it is imperative that the product data (e.g., Average Manufacturer Price (AMP), Unit Rebate Amount (URA)), and state drug utilization data (SDUD) reported in the Medicaid Drug Program system (MDP) be correct and up-to-date.  

It is the expectation that Manufacturers routinely monitor MDP product (e.g., drug category, product termination date, etc.) and pricing (e.g., AMP, BP) to ensure accuracy.  Additionally, manufacturers should verify correctness of SDUD units and reimbursement amounts reported to CMS in comparison to their state rebate invoices.  If a manufacturer has reached agreement on an adjustment and/or dispute with a state and that agreement is not reflected in MDP by the due date of the next quarterly data transmission from the state, the manufacturer should contact the state to confirm that the adjusted data has been reported to CMS.

The next annual fee calculation will use the data submitted by states for all quarters in 2022.  If there are differences between quarterly rebate invoices and the state-reported utilization data (units/reimbursement amounts) in MDP for the same quarter in 2022, we request that a manufacturer contact the appropriate state’s Technical Contact (copying CMS at MedicaidBPD@cms.hhs.gov) regarding the difference.  A list of state Technical Contacts can be found at https://www.medicaid.gov/medicaid/prescription-drugs/medicaid-drug-rebate-program.  

Note: We have sent this information to the Manufacturers’ Technical and Invoice Contacts for the Medicaid Drug Rebate Program (MDRP).  If you are not your company’s contact for the branded prescription drug fee (BPD) program, please forward to your company’s BPD contact, and be aware that he/she may need your assistance using/interpreting the rebate data being used for the annual sales fee to more effectively evaluate whether disputes are warranted, and how to present the data in such instances.

Thank you for your cooperation with this effort.  If you have any questions, please feel free to contact us via this email resource box, MedicaidBPD@cms.hhs.gov.

Sincerely,

CMS Medicaid BPD Team

Dear State Technical and Rebate Contacts,

State Drug Utilization Data (SDUD) continue to be used as part of the methodology for establishing an annual fee on branded prescription drug manufacturers that was enacted by section 9008 of the Affordable Care Act (ACA).  While the Department of Treasury is responsible for imposing these fees, the government drug programs specified in section 9008 (Medicaid, Medicare Part B, Medicare Part D, TRICARE, Department of Veterans Affairs (VA), and the Department of Defense (DOD)) are required to report drug sales information to the Department of Treasury each year so that the fees can be accurately calculated.  

For purposes of the Medicaid data, CMS does not want to impose a new reporting requirement on the states as part of this process; therefore, the SDUD that are currently reported under section 1927(b)(2)(A) of the Social Security Act (the Act) are being provided to the Department of Treasury as one element of Medicaid’s drug sales information.  If a state has not reported its SDUD, these new fees cannot be appropriately calculated; therefore, timely and complete SDUD reporting is essential to this process.  In accordance with section 1927(b)(2)(A) of the Act, states are required to submit all Medicaid SDUD, including physician administered drug utilization and managed care organization (MCO) drug utilization, to CMS within 60 days of the end of each quarter.

Additionally, many states are not applying necessary drug unit conversion factors prior to billing the labeler correctly. Since all Medicaid pharmacy programs are required to invoice for drug rebates for covered outpatient drugs (COD) reimbursed via the pharmacy and medical benefit, this may result in differences between provider billed units (National Council for Prescription Drug Programs (NCPDP) units for pharmacy claims or Healthcare Common Procedure Coding System (HCPCS) units for medical claims) and CMS rebate units.  

Please review the SDUD that has been submitted for calendar year 2022 to determine whether any additional submissions or corrections are necessary.  MDP supports edits either on-line or via direct file upload any time during the quarter.  

All 2022 SDUD corrections should be submitted into MDP, and verified/certified by COB December 27, 2023, in order to be included in the December 31st BPD Data snapshot.

States that fail to update or correct overstated or understated SDUD reported to CMS, may result in compliance action being taken to recover the amount the erroneous data submission caused to be calculated or omitted from the calculation of sales owed to the federal government under the branded prescription drug fee program.

Thank you for your cooperation with this effort.  If you have any questions, please feel free to contact us via this email resource box, MedicaidBPD@cms.hhs.gov.

Sincerely, 
CMS Medicaid BPD Team