Unit Rebate Amount Calculation

The Centers for Medicare & Medicaid Services (CMS) Medicaid Drug Rebate (MDR) system performs the Unit Rebate Amount (URA) Calculation using the drug manufacturer's pricing. The specific methodology used is determined by law, and depends upon whether a drug is classified as:

  • Single source ("S" drug category)
  • Innovator multiple source ("I" drug category)
  • Non-innovator multiple source ("N" drug category)
  • Clotting factor drug (CF)
  • Exclusively pediatric drug (EP)

CMS provides this URA information to states as a courtesy; however, drug manufacturers remain responsible for correctly calculating the URA for their covered outpatient drugs.

Current URA Calculation for "S" or "I" Drug Products

For "S" or "I" drugs, the URA is determined through four steps or calculations:

  • The first calculation provides the basic URA
  • The second provides the additional URA
  • The third adds the basic URA and the additional URA together to determine the total URA
  • The fourth compares the total URA and the quarterly AMP to determine whether the total URA exceeds the quarterly AMP

"S" or "I" Line Extension Drugs

For "S" or "I" line extension drugs the URA is determined through three steps or calculations:

  • The first calculation provides the Standard URA
  • The second provides the Alternative URA
  • The third compares the Standard URA and the Alternative URA to determine the Total URA

Current URA Calculation for "N" Drug Products

For "N" drugs, the URA is equal to 13% of Average Manufacturer Price (AMP).