Medicaid Drug Rebates: The Health Care Financing Administration Needs to Provide Additional Guidance to Drug Manufactures to Better Implement the Program

This final report points out the results of our review of selected drug manufacturers' methods used to determine average manufacturer prices (AMP) and best prices under the Medicaid drug rebate program. We recommended that the Health Care Financing Administration (HCFA): (1) survey drug manufacturers to identify the various calculation methods being used to develop the AMP, and (2) provide more specific policies based on the survey results for calculating AMP which would protect the interests of the Government and which would be equitable and the least burdensome to the manufacturers. We also recommended that HCFA establish records access and retention requirements for the drug manufacturers.