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State Technical and Rebate Contacts on 04/26/2018

Dear State Technical and Rebate Contacts,

The Division of Pharmacy is sending a reminder to states and labelers regarding the data used to calculate the upcoming Medicaid Branded Prescription Drug (BPD) annual sales fee. In addition to using the state-submitted utilization data, the labeler-submitted average manufacturer price (AMP) and the calculated unit rebate amount (URA) are also used to calculate the BPD annual sales fee. For additional information about the CMS Medicaid BPD annual sales fee calculation and best practices, please visit the Branded Prescription Drug Fee Program page.

In accordance with section 1927(b)(2)(A) of the Social Security Act (the Act), states are required to submit all Medicaid drug rebate utilization data, including physician administered drug utilization and managed care organization (MCO) drug utilization, to CMS within 60 days of the end of each quarter. Since state drug utilization data is a main component of the methodology used for establishing the BPD annual sales fee, any utilization data discrepancies (e.g., utilization data submitted in the incorrect Unit of Measure (UOM), late-reporting, etc.) will cause the BPD annual sales fee to be incorrectly calculated. Please review the utilization data that has been submitted for 2017 to determine whether any additional submissions or corrections are necessary. If yes, please submit the additional data/corrections by November 30, 2018, via the normal drug rebate utilization data transmission process. 

Please note that if states fail to update or correct overstated or understated state drug utilization data reported to CMS, it may result in compliance action 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 at, MedicaidBPD@cms.hhs.gov.


CMS Medicaid BPD Team



Collections: BPD