Close Menu Congressman Kurt Schrader

Legislation

Medicaid Drug Rebate Accountability Act

H.R.5712

The Medicaid Drug Rebate Accountability Act would compel manufacturers to correct inaccurate classification data reported to the Medicaid rebate program.

Under the Medicaid Drug Rebate Program, drug manufacturers who wish to have their drugs covered by Medicaid must pay a rebate to federal and state governments, and the rebate rate is different for brand drugs, at 23.1% of the Average Manufacturer Price (AMP) per unit, and generic drugs, at 13% of AMP per unit. When applying for the rebate, the manufacturer must indicate whether their drug is brand or generic. According to an HHS Inspector General Report published in December of last year, however, hundreds of drugs in the rebate program that should be considered brand were marked in their applications as generic. That same report found that this may have cost the rebate program upwards of $1 billion. Under the Medicaid Drug Rebate Accountability Act, the Centers for Medicare and Medicaid (CMS) will be required to notify drug manufacturers if their drugs are found to be classified incorrectly. In turn, drug manufacturers will be required to reclassify any misclassified drugs within 30 days of notice from CMS. If a correction is not made within that 30-day window, the manufacturer will be fined $100,000 per day until classification is corrected.