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DoJ Investigating Lilly's AMP Reporting, Despite Lack Of Final Rule

This article was originally published in The Pink Sheet Daily

Executive Summary

Lilly revealed that the US Department of Justice is investigating how it treats distribution service agreements with wholesalers when reporting average manufacturer price to CMS – one of the topics that is supposed to be addressed in the yet-unpublished final AMP rule. The government is also looking into contracting and pricing of Merck's Dulera.

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AstraZeneca, Teva, Biogen Stung By 'Bona Fide' Service Fees; Settle Medicaid Rebate Suit

Feds and the states aren’t getting large settlements (just over $55 mil. total) but the whistleblower case underscores how murky the definition of AMP remains; litigation against Genzyme is ongoing.

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

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.

AMP Rule Tells Manufacturers To “Make Reasonable Assumptions” In Determining Fair Market Value For Service Fees

CMS’ proposed rule on average manufacturer prices for Medicaid relies on examples given in the Affordable Care Act for its list of “bona fide service fees” that manufacturers should exclude from the AMP calculation, but does not further expand on them. The proposed rule also avoids defining “fair market value” for such fees.

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