Back on November 17, the Centers for Medicare & Medicaid Services (CMS) released a slew of policy on the Medicare prescription drug benefit transition to the Medicare manufacturer discount program. This is the program that will be replacing the Coverage Gap discount program as of January 2025.
The big document was the Part D Manufacturer Discount Program Final Guidance. 56 pages of skimmable policy that seems a little boring. But boring isn’t always bad.
We also got a little bit of something new with the Medicare Part D Manufacturer Discount Program: Methodology for Identifying Specified Manufacturers and Specified Small Manufacturers. Calculating small manufacturer numbers was never so fun.
And if you’re still hanging in there – we had both the final Manufacturer Discount Program Agreement and Third Party Administrator Agreement. I know. I spent the night of the 17th (a Friday) reading this stuff and I’m still wondering why.
The long and the short of it is that CMS is taking the Coverage Gap program and transitioning it to the new discount program (10% manufacturer discount in initial phase, 20% manufacturer discount in catastrophic – unless a small manufacturer and phased in. It is mostly pretty obvious but a few things that caught my eye:
- Protected classes are not changing.
- The negotiated price is the lowest possible reimbursement that a network dispensing pharmacy will receive, in total, for a particular drug.
- Small manufacturers will need to provide some data and CMS will use claims data to check if they qualify for the phase-in of the discount program and let manufacturers know if they qualify after March 1, 2024.
- CMS is not accepting comments on methodology for small manufacturer determination for Part D discounts.
- Plans pay the differential in phase-in from small manufacturers, CMS does not feel they are authorized to pay it.
- CMS will be providing more examples of straddle claims, etc.
- CMS will be providing more guidance on the calculation of the subsidy for negotiated products (that now won’t have Part D discount program.)
- Manufacturers will need to sign a new agreement. Discount program agreement and third-party agreement were released as final documents.
If you have any questions or need help with any of this – let me know.
