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Manufacturer Technical and Invoice Contacts on 04/26/2018

Dear Manufacturer Technical and Invoice Contacts,

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

The annual sales fee calculation utilizes the labeler’s AMP and URA, as well as data submitted by states for all quarters in 2017. To that end, please ensure that all AMP data is updated, and that all the data submitted by states to CMS matches what the states have submitted to the labeler on the quarterly rebate invoices. The Drug Data Reporting for Medicaid (DDR) system contains state drug utilization data (SDUD) from the last three years and is updated nightly, so please use this data to compare the units on the state’s invoices and ensure all agreed-upon adjustments to units have been reflected in the state’s data submission to CMS. If there are differences found, we request that the labeler contact the appropriate state’s Technical Contact (copying CMS at MedicaidBPD@cms.hhs.gov). A list of state Technical Contacts can be found on Medicaid.gov or in DDR, under the General Information/State Contacts tab.  

If a discrepancy is found, states can resubmit utilization data with corrected units to CMS. Since the CMS SDUD file is being used, in part, to determine the BPD annual sales fee, any understated or overstated data will result in the annual sales fee being understated or overstated. CMS encourages labelers to contact states as soon as discrepancies are discovered, giving priority to significant disparities in utilization to help ensure accuracy in the calculation of the annual sales fee.

Please note that this notice is sent to the Manufacturers’ Technical and Invoice Contacts for the Medicaid Drug Rebate Program (MDRP). If you are not your company’s contact for the BPD program, please forward this notice 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 BPD disputes may be warranted, and how to present the data for these disputes.

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