These resources provide an overview of federal Medicaid prescription drug policies that directly influence states’ reimbursement of prescription drugs, including an in-depth look into each state’s coverage and reimbursement methodologies as provided in the state’s Medicaid plan. We also highlight those states with supplemental drug rebate agreements and provide a list of State Pharmaceutical Assistance Programs (SPAP) that currently meet our criteria for exemption from the manufacturers’ calculations of best price. This state prescription drug resource page includes the following contents related to the Medicaid Pharmacy Program:
- 340B Drug Pricing Program
- Physician Administered Drugs
- State Medicaid Reimbursement Information
- State Supplemental Drug Rebate Agreements
- State Pharmaceutical Assistance Programs Best Price
340B Drug Pricing Program
The 340B Program requires drug manufacturers participating in Medicaid to provide outpatient drugs to covered entities at significantly reduced prices. To participate in the 340B Program, covered entities must register and be enrolled with the 340B program and comply with all 340B Program requirements administered by HRSA. State Medicaid agencies are prohibited from billing manufacturers for Medicaid rebates for drugs dispensed to Medicaid patients that have already been discounted under the 340B Program. Additional information on the 340B Program.
- Best Practices on Avoiding 340B Duplicate Discounts in Medicaid (PDF, 171.27 KB)
Physician Administered Drugs
The Deficit Reduction Act of 2005 (DRA) requires states to collect Medicaid rebates for certain physician-administered drugs. Beginning January 1, 2006, States must collect utilization data for single source, physician-administered drugs in order to secure rebates for such drugs. Effective January 1, 2007, states must also collect National Drug Codes (NDC) for the 20 multiple source physician-administered drugs with the highest dollar volume in Medicaid. Beginning January 1, 2008, the DRA provides that states not collecting NDCs on these 20 drugs will not receive Federal matching payments for the drugs unless they receive a hardship waiver. For further information on this part of the DRA, please see the SMD letter on physician-administered drugs (PDF, 75.81 KB).
The Centers for Medicare & Medicaid Services (CMS) previously published a listing of the top 20 multiple source physician-administered drugs. However, after a thorough search of the limited highest dollar volume Medicaid multiple source drugs, we proposed to stop publishing the list after we found that most of the drugs were low-cost products and would not effectively represent a benefit to the states in rebate collection. Further, we believe the impact on states in removing the top 20 listing was minimal, because virtually all states do not limit NDC numbers on claims for only these drugs, but require NDC submission for all physician-administered drugs.
PRA Disclosure Statement: According to the Paperwork Reduction Act of 1995, no persons are required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0938-1026 (Expires: July 31, 2021). The time required to complete this information collection of National Drug Codes (NDC) for physician-administered drugs is estimated to average 0.78 hours annually per each physician’s office. If you have comments concerning the accuracy of the time estimate or suggestions for improving this form, please write to CMS, 7500 Security Boulevard, Attn: PRA Reports Clearance Officer, Mail Stop C4-26-05, Baltimore, Maryland 21244-1850.
State Medicaid Reimbursement Information
The Medicaid reimbursement chart outlines the methodologies and professional dispensing fee amounts utilized by states. Pharmacy payment requirements are outlined in Federal regulations at 42 CFR 447 Subpart F. The Code of Federal Regulations specifically covers payment requirements for estimated acquisition cost and reasonable dispensing fees. Co-payment amounts are addressed at 42 CFR 447.54. Information will be updated and posted on the web quarterly with the data provided for in the CMS approved state plans. We update the chart quarterly and archive the previous four quarters.
State Supplemental Drug Rebate Agreements
Many states have received CMS approval on their State Plan Amendments to enter into single-state and multi-state supplemental drug rebate pools that generate rebates that are at least as large as the rebates set forth in the Health and Human Services Secretary's national rebate agreement with drug manufacturers. For your information, we have compiled a chart that depicts the States with Medicaid Pharmacy Supplemental Rebate Agreements (SRA) (PDF, 48.83 KB) with their effective dates.
State Pharmaceutical Assistance Programs Best Price
The Medicaid statute allows manufacturers participating in the Medicaid Drug Rebate Program to exclude prices to SPAPs from their Medicaid best price calculations. CMS has compiled a list of programs that meet the criteria to be considered SPAPs called Medicaid SPAP Best Price List (PDF, 28.83 KB). For the purposes of determining whether a SPAP is excluded from the Medicaid best price, manufacturers should refer to this list. Please note that this list only includes states that submitted a description of programs to CMS for review based on the established criteria in CMS' Manufacturer Release No. 68 (PDF, 141.03 KB) (April 1, 2005). The qualification of state-only programs as SPAPs is based on the information provided by the state and may be subject to further review if changes occur within the program.
Questions regarding the topics on this page? Email RxDrugPolicy@cms.hhs.gov.
Disclaimer: Please note that the information provided on this web page does not bind or obligate the Centers for Medicare and Medicaid Services (CMS). The statements included on this web page are intended to provide information on State Prescription Drug Resources and do not in any way revise or modify the requirements set forth in Section 1927 of the Act, the national drug rebate agreement (NDRA), subsequent program releases, or regulations.
Page last updated on February 25, 2021