How do state Medicaid programs determine what substance use disorder treatment medications need prior authorization? An overview for clinicians

Table 1 Types of rebates available to state Medicaid programs under the Medicaid Drug Rebate Program

Rebate type	Entity collecting the rebate	Brand versus generic	Methodology
Federal rebate, also known as mandatory or statutory rebate	State Medicaid program	Brand	Base rebate, the greater of: 23.1% of the average manufacturer price, or Average manufacturer price minus “best price”^a Plus the inflationary rebate, if applicable: Difference between the increase in average manufacturer price and the increase in Consumer Price Index Urban value
Federal rebate, also known as mandatory or statutory rebate	State Medicaid program	Generic	Base rebate: 13% of the average manufacturer price Plus the inflationary rebate, if applicable: Difference between the increase in average manufacturer price and the increase in Consumer Price Index Urban value
Supplemental rebate	State Medicaid program or Medicaid managed care plans, varies by state	Brand only	Methodology is proprietary and confidential Rebates are typically provided in exchange for a preferred position on the preferred drug list

^a“Best price” refers to the best price a manufacturer has given to most other payers, with some limited exceptions for certain federal health care programs

ISSN: 1940-0640