CMS proposes rule to improve Medicaid and PBM price transparency

CMS is proposing a new rule for drug manufacturers, pharmaceutical benefit managers and managed care plans to increase drug price transparency in Medicaid. 

In a proposed rule published May 23, the agency laid out plans to increase transparency by requiring manufacturers to disclose some pricing information through a price survey and requiring PBMs to disclose more pricing details to managed care plans. 

The proposed rule would: 

  • Establish a Medicaid drug price verification survey, which would require manufacturers of some high-cost drugs to submit detailed pricing information to CMS. Non-proprietary data would be made publicly available, the agency said, and would help state agencies negotiate Medicaid drug prices with manufacturers. 

  • Require PBMs to report the cost of dispensing and administering drugs to managed care plans separately from any additional costs charged by the PBM. The agency said this would cut down on inflated medical loss ratios and bring down capitation rates. 

  • Give CMS increased oversight of drug classifications in Medicaid and the ability to require corrective actions from manufacturers if a drug is incorrectly classified as brand name rather than generic. The proposed rule would also ensure states get the appropriate rebates from manufacturers. 

"With today's proposed rule, we are advancing unprecedented efforts to increase transparency in prescription drug costs, being good stewards of the Medicaid program, and protecting its financial integrity. This proposed rule will save both states and the federal government money," HHS Secretary Xavier Becerra said in a news release. 

The proposed rule is open for public comment through July 25. 

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