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Calculating AMP: Medicaid Proposed Rule Provides Answers, Some Detailed, Some Vague, To Manufacturers’ Questions

Executive Summary

Manufacturers seeking answers on how to comply with the law on calculating average manufacturer price for drugs in Medicaid can turn to CMS’ proposed rule on the topic, published in the Feb. 2 Federal Register. The rule addresses a wide range of issues, including how closely manufacturers must track sales to retail community pharmacies for reporting, how to define a “retail community pharmacy,” how to define “bona fide service fees” and fair market value for them, since they can be excluded from AMP, and how to identify “5i” specialty drugs not generally dispensed at a retail community pharmacy, since they have their own special rules for calculating AMP.

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