On March 31, 2016, CMS announced that it was delaying the April 1, 2016 effective date for manufacturers to calculate the average manufacturer price (“AMP”) for the so-called “5i-drugs” – i.e., inhalation, infusion, instilled, implanted or injectable drugs – to July 1, 2016.  The provision is part of the final rule with comment period that CMS released on January 21, 2016, which implements the Medicaid pricing and reimbursement provisions of the Affordable Care Act and related legislation. 

According to CMS, it had come to the agency’s attention that drug manufacturers might need additional time to complete system modifications to ensure all necessary changes would be operational by the April 1, 2016 effective date, particularly with respect to incorporating and operationalizing the changes in the final rule into their business policies, procedures and systems for the 5i AMP calculation.  Manufacturers still must timely report monthly and quarterly AMPs as of the original April 1, 2016 effective date, but may do so using reasonable assumptions.  Once manufacturers have completed the system modifications necessary to calculate the AMPs for 5i drugs, then they will be responsible for recalculating and restating their monthly and quarterly AMPs back to April 1, 2016.  

CMS plans to release a frequently asked questions document as well as operational guidance to address questions received since CMS published the final rule.  For more on the final rule, please see the King & Spalding Client Alert, available by clicking here. 

Reporter, Kerrie S. Howze, Atlanta, +1 404 572 3594, khowze@kslaw.com.