Current through Register Vol. 49, No. 9, September, 2024
1.
Definitions.As
used herein, the following terms shall have the meanings set forth below:
1.1.
"Agreement"shall mean this
Supplemental Rebate Agreement, including all documents attached or incorporated
by reference.
1.2.
"Average
Manufacturer Price ("AMP")"means, The Average Manufacturer Price as
defined in
42 U.S.C.
1396r-8 and final regulations promulgated by
CMS thereto, if any, as such statute or regulations may be amended from time to
time and shall exclude rebates paid under CMS authorized Supplemental Rebate
Agreements.
1.3.
"Best
Price"shall mean the Best Price as defined in
42 U.S.C.
1396r-8 and final regulations promulgated by
CMS thereto, if any, as such statute or regulations may be amended from time to
time and shall exclude rebates paid under CMS authorized Supplemental Rebate
Agreements.". "Centers for Medicare & Medicaid Services" or
"CMS" shall mean the agency within the Federal Department of Health and Human
Services that is charged with overseeing the Medicaid programs administered by
states
1.4.
"Product
Category"shall mean a pharmaceutical product that is therapeutically
interchangeable to one or more Covered Products of Manufacturer.
1.5.
"CMS Agreement"means the
Manufacturer's drug rebate contract with the Centers for Medicare &
Medicaid Services (or 'CMS'), formerly known as the Health Care Financing
Administration, entered pursuant to Section 1927 of the Social Security Act [
42 U.S.C. §
1396r-8].
1.6.
"CMS Basic Rebate"means,
with respect to the Supplemental Covered Product(s), the quarterly payment by
Manufacturer pursuant to Manufacturer's CMS Agreement, made in accordance with
Section 1927(c)(1) or Section 1927(c)(3) of the Social Security Act [
42 U.S.C. §
1396r-8(c)(1) and 42
U.S.C. § 1396r8(c)(3)].
1.7.
"CMS Additional
Rebate"means, with respect to the Supplemental Covered Product(s), the
quarterly additional payment by Manufacturer pursuant to
Manufacturer's CMS Agreement, made in accordance with Section
1927(c)(2) of the Social Security Act (pertaining to the additional rebate
calculated for single source and innovator multiple source drugs), as may be
applicable [
42 U.S.C. §
1396r-8(c)(2)].
1.8.
"CMS
Rebate"means, with respect to the Supplemental Covered Product(s), the
quarterly payment by Manufacturer
1.9.
"Covered Product"OR
"Supplemental Covered Product"shall mean a pharmaceutical product
or products identified in Attachment A of this Agreement, which is attached
hereto and incorporated herein by reference
1.10.
"Covered Outpatient
Drug"will have the meaning as set forth in
42 U.S.C.
1396r-8(k)(2),(k)(3) and
(k)(4) and regulations promulgated by CMS
thereto, if any, as such statute or regulations may be amended from time to
time.
1.11.
"Consumer Price
Index-Urban" or "CPI-U"shall have the same meaning as in the Federal
Rebate Agreement.
1.12.
"Federal Rebate"shall mean any monetary payment remitted by
Labeler pursuant to the Federal Rebate Agreement and made in accordance with
42 U.S.C.
1396r-8.
1.13.
"Federal Rebate
Agreement"shall mean the contractual agreement between Labeler and the
Federal Secretary of Health and Human Services entered pursuant to
42 U.S.C.
1396r-8.
1.14.
"Generic Equivalent"shall
mean a pharmaceutical product that has been designated by the U.S. Food and
Drug Administration as therapeutically equivalent to the Covered Product for
the purposes of this definition, the concept of therapeutic equivalence applies
only to products containing the same active ingredient(s) and does not
encompass a comparison of different therapeutic agents used for the same
condition.
1.15.
"Guaranteed
Net Unit Price" or "Net Unit Price" or "Discount Per Unit"means, with
respect to Covered Product(s), the amount per unit or for each NDC set forth in
Attachment A and used in the Supplemental Rebate Calculation, Attachment
B.
1.16.
"Manufacturer" or
"Labeler" shall have the meaning set forth in
42 U.S.C.
1396r-8(k)(5), shall also
mean the entity holding legal title to or possession of the NDC(s) for the
Covered Product(s) and shall include Labeler identified above.
1.17.
"Medicaid MCO"means a
Medicaid managed care organization that is responsible for coverage of Covered
Outpatient Drugs for Medicaid Recipients who are enrolled with the managed care
entity, as further described in
42 U.S.C. §
1396b(m), as may be amended
from time to time.
1.18.
"Medicaid Recipient"shall mean any person enrolled in the State Medicaid
Program and eligible to receive prescription drug benefits under a fee for
service or Medicaid MCO arrangement.
1.19.
"National Drug Code"or
"NDC"shall mean the unique nine (9) or eleven (11) character code
assigned to drug products composed of three distinct sub-codes to include the
labeler code, product code, and package size as requested at the time of bid
solicitation.
1.20.
"Participating Medicaid MCO" means a Medicaid MCO that the State
has determined is eligible for Supplemental Rebates consistent with the State
Medicaid Plan and the State's contract with the Medicaid MCO. In order to
qualify as a Participating Medicaid MCO, the Medicaid MCO must have aligned its
formulary and/or preferred drug list, as applicable, with the State's PDL,
assuring access to Covered Product(s) is no more restrictive than the State PDL
requirements applicable to the Supplemental Covered Product.
1.21.
"Preferred Drug List"or
"PDL"shall mean a document listing various pharmaceutical products
designated as preferred drugs by the State Medicaid Program in consultation
with the State's Drug Review Committee (DRC) pursuant to the state's relevant
enabling legislation, as applicable.
1.22.
"Prior Authorization"
shall mean a process by which the State Medicaid Program approves prior
to reimbursing various pharmaceutical products for the purpose of guiding the
prescribing, dispensing, and acquisition of pharmaceutical products covered by
the State Medicaid Program.
1.23.
"Quarter"shall mean one of the four three-month periods by which
the calendar year is divided, that calendar year beginning January 1 and ending
on the following December 31.
1.24.
"State Medicaid Program"shall mean the joint federal and state
medical assistance program as established and defined pursuant to Title
42 U.S.C.
1396, et seq., that provides reimbursement
for or coverage of prescription drug products to Medicaid Recipients.
1.25.
"State Utilization Data" or
"State Utilization"shall mean the information provided on the total
number of units of each dosage form and strength, as identified by National
Drug Code (NDC) for each of Labeler's Covered Products reimbursed by Arkansas
during a Quarter where Covered Product was listed as preferred on the Arkansas
Preferred Drug List. In addition, State Utilization Data shall include the
units invoiced hereunder with respect to such Medicaid MCO utilization, in
addition to the applicable state fee-for-service Medicaid utilization, provided
conditions as set forth in Attachment C are met. In no case may the State
Supplemental Rebate amount be a negative amount.
1.26.
"State Supplemental
Rebate"or "Supplemental Rebate" shall mean any monetary
payment remitted by Labeler, pursuant to this Agreement, that supplements the
Federal Rebate.
1.27.
"Supplemental Rebate Amount" means, with respect to the Covered
Product(s), the amount(s) specified in Attachment A, and Supplemental Rebate
Calculation, Attachment B, that the Manufacturer has agreed to reimburse
Arkansas per unit of drug in accordance with the formula detailed in the above
Attachments.
1.28.
"Supplemental Rebate Per Unit" or "SRPU" is calculated for each
NDC of a Covered Product according to the formula in Attachment B
1.29.
"Supplemental Rebate Invoice"
shall mean the report that itemizes and aggregates, by NDC number, the
claims reimbursed by Arkansas for each Covered Product during a Quarter and any
cover letter that accompanies said report. The Supplemental Rebate Invoice
shall comply with the requirements for Medicaid Utilization Information as set
forth in the Federal Rebate Agreement
1.30.
"Unit"shall mean the drug
unit in the lowest identifiable amount on which the rebate is calculated (e.g.,
tablet or capsule for solid dosage forms, milliliter for liquid forms, gram for
ointments or creams) and shall be the same unit as specified by the
Manufacturer as part of the submission of data under
42 U.S.C. §
1396r-8.
1.31.
"USC" shall mean the
United States Code. All references to this agreement to USC chapters or
sections shall include any successor, amended, or replacement
statute.
1.32.
"Unit Rebate
Amount" or "URA"shall mean the computed unit amount to which the State
Utilization Data is applied for the Federal Rebate or Supplemental Rebate
payment due. For the purposes of this Agreement, unit rebate amount shall be
synonymous with the terms Rebate Per Unit (RPU) and Rebate Amount Per Unit and
encompass said terms.
1.33.
"Unit Rebate Off-Set Amount" or "UROA"shall mean the unit amount
calculated by CMS pursuant to
42 U.S.C.
1396r-8 and final regulations promulgated by
CMS thereto, if any, as such statute or regulations may be amended from time to
time.
1.34.
"Wholesale
Acquisition Cost" or "WAC"shall mean the manufacturer's list price for
the Covered Product to wholesalers or direct purchasers in the United States,
not including prompt pay or other discounts, rebates or reductions in price,
that was in effect on the last day of the subject Quarter as published in a
national drug data file, such as First Data Bank, Medi-Span or other
publications of drug pricing data.
2.
State Obligations
2.1.
Preferred Drug List. To be
eligible for the State Supplemental Rebates specified in Attachment B:
2.1.1. Covered Product(s) will accrue
Supplemental Rebates when listed as preferred on the State Preferred Drug List
and when not disadvantaged to other preferred drugs on the State PDL unless
described in Attachment A. At the sole discretion of the State, and without
notice to Labeler, Covered Product can be moved from preferred to non-preferred
status on the State's PDL. Rebate accrual begins and ends on the effective date
noted on the State's PDL
2.1.2.
State shall place Covered Product(s) in an advantaged position relative to
non-preferred drugs regarding Preferred Drug List status; this shall not in any
way limit or restrict other mechanisms that the State may use to ensure proper
utilization of Manufacturer's products, such as quantity limits or day supply
limits, or other clinical Prior Authorization criteria applied to the Covered
Product;
2.2.
Preferred Drug List Documentation and Publication. State shall
communicate the inclusion of Covered Product on the Preferred Drug List to
State Medicaid Program providers through a notification process, which may
include, but not be limited to, issuance of written notification to Medicaid
providers, inclusion on the Department of Human Services website, or remittance
advice messages. The PDL communication will include an effective date of said
changes.
2.3.
Invoicing. State or its designee shall invoice State Supplemental
Rebates separately from the Federal Rebates, on a Quarterly basis, utilizing an
invoice format substantially similar to that of the Federal Rebate invoice that
provides at a minimum for each Covered Product reimbursed by the State during
the Quarter. The State, at its option, may compute the total Supplemental
Rebate anticipated but it shall remain the responsibility of Labeler to
correctly calculate the Supplemental Rebate amount based on the applicable
methodology set out in Attachment B. The State or its designee shall submit the
Supplemental Rebate invoice to the Labeler's invoice contact, as identified by
Labeler to CMS.
2.4.
Approval of Generic Equivalent.
2.4.1. If during the term of this Agreement,
a Generic Equivalent of the Covered Product should become available, the State,
at its sole discretion, may allow the applicable Covered Product to remain
preferred on the Arkansas PDL. Additionally, and without notice to Labeler,
Covered Product can be moved from preferred to non-preferred status on the
State's PDL. Rebate accrual begins and ends on the effective date noted on the
State's PDL.
3.
Manufacturer Obligations
3.1.
State Supplemental Rebate
Payment. Manufacturer agrees to provide a State Supplemental Rebate for
each of its Covered Products that is paid for by the State as a Covered
Outpatient Drug for each calendar Quarter that Covered Products are included in
the Preferred Drug List. Manufacturer shall pay to State the State Supplemental
Rebate amount in accordance with the formula set forth in Attachment B. Nothing
in this Agreement shall be construed to relieve Manufacturer from its
obligation to make payments according to its CMS Agreement for utilization by
State Medicaid Recipients and if applicable, those Medicaid Recipients enrolled
in Participating Medicaid MCOs in accordance with Attachment C. State shall
remit the appropriate share of the State Supplemental Rebate payments made
under this Agreement to CMS as required under its approved state plan. While
the State or its designee, may compute the total Supplemental Rebate
anticipated, it shall remain the responsibility of Labeler to correctly
calculate the Supplemental Rebate amount owed to the State based on the
applicable methodology set out in Attachment B. Manufacturer will also
calculate and provide the State a CMS Rebate for the Supplemental Covered
Product(s), which includes the CMS Basic Rebate and CMS Additional Rebate, as
appropriate, in accordance with the terms of the CMS Agreement. Manufacturer's
obligation for CMS Rebates will continue for the duration of the Manufacturer's
CMS Agreement.
3.2.
Payment and Interest Timeframe.
Manufacturer shall pay to State the State Supplemental Rebate amount to which
State is entitled in accordance with the formula set forth in Attachment B,
within thirty-eight (38) days of Manufacturer's receipt of such submission
pursuant to Section 2.3. Manufacturer will pay the State Supplemental Rebates,
including any applicable interest in accordance with Section 1903 (d)(5) of the
Act. Interest on the State Supplemental Rebates begins accruing 38 calendar
days from the postmark date of the State's invoice and supporting Rebate
Summary sent to the Manufacturer and interest will continue to accrue until the
postmark date of the Manufacturer's payment. Interest will accrue using the
same methodology as in the CMS Agreement.
3.3.
Dispute
Resolution3.3.1. In the
event that in any quarter a discrepancy in the State Medicaid Program's
Utilization data is questioned by the Manufacturer, which the Manufacturer and
the State Medicaid Program in good faith are unable to resolve, the affected
parties shall attempt to reconcile all differences through discussion and
negotiation; if that attempt fails, the parties will resolve their dispute in
accordance with generally applicable procedures followed by the State Medicaid
Program or CMS in disputes concerning CMS Rebates. Notwithstanding anything to
the contrary herein, any dispute relating to eligibility of the State MCO
utilization for State Supplemental Rebates hereunder shall be resolved
exclusively between the Manufacturer and the State.
3.3.2. If the Manufacturer, in good faith,
believes the State Medicaid Program's State Utilization data is erroneous, the
Manufacturer shall pay the State Medicaid Program that portion of the rebate
claimed, that is not in dispute by the required date. The balance in dispute,
including applicable interest, if any, will be paid by the Manufacturer to the
State Medicaid Program by the due date of the next quarterly payment after
resolution of the dispute.
3.3.3.
The State Medicaid Program and the Manufacturer will use their best efforts to
resolve the discrepancy within 60 days of receipt of written notification.
Should additional information be required to resolve disputes, the State
Medicaid Program and its designee will cooperate with the Manufacturer in
obtaining the additional information.
3.3.4. In the event that the State Medicaid
Program and the Manufacturer are not able to resolve a discrepancy regarding
State Utilization data, as provided for in Sections 3.3.1 through 3.3.3, the
Manufacturer may request a reconsideration of the State Medicaid Program's
determination within 30 days after the end of the 60 day period identified in
Section 3.3.3. The Manufacturer shall submit with its written request its
argument in writing, along with any other materials, supporting its position to
the State Medicaid Program and its designee. The State Medicaid Program shall
review the written argument and materials and issue a decision in the
matter.
3.4.
Discretion to Market. Nothing in this
Agreement shall be construed to prohibit Manufacturer from discontinuing
production, marketing or distribution of any Covered Product or from
transferring or licensing any Covered Product to a third party. It is
understood that Manufacturer is liable for the payment of State Supplemental
Rebates only for Covered Products (as identified by the 11-digit NDC code) and
dispensed or administered to Medicaid Recipients or those Medicaid Recipients
enrolled in Participating Medicaid MCOs. If Manufacturer elects to discontinue
production, marketing or distribution of any Covered Product or to transfer or
license any Covered Product to a third party, Manufacturer shall make every
reasonable effort to notify State prior to such actions.
4.
Term and Termination
4.1.
Effective
Date.
4.1.1. The
Manufacturer's obligation for State Supplemental Rebates will begin
________________ [DATE] and will continue through the Rebate Billing Period
that ends ________________ [DATE].
4.1.2. At the sole discretion of the State,
State may solicit Manufacturer for an enhanced GNUP on its Supplemental Covered
Products.
4.1.3.
Breach.If either party commits a material breach of this
Agreement, the non-breaching party shall deliver written notice mailed by
certified mail, return receipt requested, of the alleged breach to the
breaching party, with an opportunity for the breaching party to cure the breach
during the thirty (30) day period following the delivery. Failure to cure shall
give the non-breaching party the right to cancel this Agreement at the end of
the thirty (30) day period. The non-breaching party shall give the breaching
party final written notice of the cancellation of this Agreement.
4.1.4.
Termination. The State
may terminate its participation in this Agreement by giving Manufacturer
written notice at least (90) days prior to the annual anniversary date of this
Agreement, in which case termination shall become effective on the annual
anniversary date of the date of effective date of this Agreement. The
termination of this Agreement by the State shall not affect the Manufacturer's
or State's obligations under this Agreement. Manufacturer may terminate this
Agreement and all Addenda by giving the State written notice at least ninety
(90) days prior to the annual anniversary date of this Agreement, in which case
termination shall become effective on the anniversary date of this Agreement.
Manufacturer's right of termination is limited to the right to terminate the
entire Agreement. In addition, this Agreement shall be coterminous with the CMS
Rebate agreement, in the event that such agreement is terminated for any
reason.
4.2.
Accrued Obligations/Remedies. The expiration or termination of
this Agreement shall not affect any rights or obligations of the parties that
have accrued prior to the effective date of such termination. The fact that
either party exercises any right of termination it may have under this
Agreement shall not prevent such party from pursuing any other remedy it may be
entitled to in law or equity. Any remedy provided herein shall not be deemed an
exclusive remedy unless expressly provided for as such.
4.3.
Execution, Amendment, and
Waiver. This Agreement shall be binding only upon signature by both
parties. This Agreement, or any provision, may be altered, amended, or waived
by a written amendment executed by both parties as authorized by
CMS.
5.
Miscellaneous
5.1.
Record
Keeping and Audit. During the term of this Agreement and for a period of
five (5) years thereafter, both parties to the Agreement shall use reasonable
efforts at all times to ensure that they maintain accurate books, files and
records relevant to this Agreement. At Manufacturer's written request, State or
its agent shall make such information available for inspection by Manufacturer
representatives or its designated auditors during regular business hours. Upon
written request, each party shall otherwise have the right to inspect, up to
once each year, all such relevant books, and records of the other party to
verify compliance with the terms of this Agreement.
5.2.
Indemnification.
Manufacturer shall be responsible for and shall indemnify and hold State
harmless from all claims resulting from the acts or omissions of Manufacturer
and any Subcontractor of the Manufacturer in its performance of this
Agreement.
5.3.
Confidentiality. Except as otherwise may be required to be
disclosed by law and in accordance with the CMS Agreement between the Secretary
of Health and Human Services and the drug manufacturers, information disclosed
by Manufacturer in connection with this Agreement will not be disclosed by the
State. The State finds that the provisions of Attachment A to this Agreement
comprise files that if disclosed would give advantage to competitors or
bidders. Each party shall maintain the confidentiality of all the terms and
conditions of this Agreement throughout the term hereof and for a period of
five (5) years thereafter.
5.3.1.
Patient Information.State, its agents, employees and contractors
shall not provide to Manufacturer any patient identifiable information or
protected health information or any other information prohibited or regulated
by laws or regulations governing confidentiality of medical or other
information.
5.4.
Notices. Except for any notice of alleged breach under Subsection
4.1.1, All written notices, requests and communications, unless specifically
required to be given by a specific method, may be:
(i) delivered in person, obtaining a
signature indicating successful delivery;
(ii) sent by a recognized overnight delivery
service, obtaining a signature indicating successful delivery; or
(iii) sent by certified mail, obtaining a
signature indicating successful delivery, to the address set forth below.
Notwithstanding the forgoing, notices other than those pertaining to contract
termination, amendment, and assignment, which may include, but not be limited
to State Supplemental Rebate invoices, shall not by subject to the formal
"notice" requirements, and may be transmitted by State or its designee to the
Manufacturer via US Mail or electronic means, which may include, without
limitation, facsimile or electronic mail, and any electronic communication
shall be considered received as of the date/time of such electronic
transmission by the sender:
State
Attn: Manufacturer
Attn:
5.5.
Force Majeure.
Noncompliance with any obligations hereunder due to force majeure, such as acts
of God, laws or regulations of any government, war, civil commotion,
destruction of production facilities and materials, fire, earthquake or storm,
labor disturbances, shortage of materials, failure of public utilities or
common carriers, and any other causes beyond the reasonable control of the
parties, shall not constitute breach of contract.
5.6.
Assignment. Neither party
shall have the right to assign this Agreement to a third party without the
prior written consent of the other party, which consent shall not be
unreasonably withheld. Any permitted assignee shall assume all obligations of
its assignor under this Agreement. No assignment shall relieve any party of
responsibility for the performance of any obligations that have accrued prior
to such assignment.
5.7.
No
Waiver of Rights. The failure of either party to insist upon the strict
observation or performance of any provision of this Agreement or to exercise
any right or remedy shall not impair or waive any such right or remedy in the
future. Every right and remedy given by this Agreement to the parties may be
exercised from time to time as often as appropriate.
5.8.
Entire Agreement.This
Agreement contains the entire agreement and understanding of the parties. This
Agreement may not be amended except upon the written agreement of both
parties.
5.9.
Governing Law.
The laws of the State of Arkansas shall govern this Agreement. In the
event of a lawsuit involving this Agreement, venue shall be proper only in
Pulaski County, Arkansas.
5.10.
Effect of Future Laws.For purposes of this section "Future Laws"
means any enactment or rule promulgation, and any final legal or administrative
determinations made by a court or tribunal of competent jurisdiction that
materially impairs any party's ability or obligation to carry out its
obligations or receive consideration due under this Agreement. "Future laws"
does not include changes to the federal Medicaid rebate program unless those
changes expressly govern state supplemental rebate agreements. In the event of
the occurrence of a Future Law, each party shall have the right to enter into
good faith negotiations with the other in order to seek to agree on reasonable
terms for maintaining the intent of the Agreement. Agreement on any such terms
shall be at the sole discretion of each party. If the parties do not agree
within sixty (60) days of a party's written request for negotiations, either
party may terminate this Agreement with respect to the affected Covered
Products upon expiration of the sixty (60) day period, with immediate
effect.
5.11.
Compliance with
Law. In connection with its respective obligations under this Agreement,
each party shall comply with all applicable federal, state and local laws and
regulations, including without limitation any disclosure or consent
requirements.
5.12.
Authority. State and Manufacturer each represent and warrant to the
other that the person signing below has all requisite legal power and authority
to execute this Agreement on behalf of each party and each party shall thereby
be bound.
5.13.
Best Price
Contingency. The effectiveness of this Agreement shall be contingent on
Manufacturer's Best Price and AMP not being affected by State Supplemental
Rebates.
5.14.
CMS Approval
Contingency. The effectiveness of this Agreement shall be contingent on
receipt of CMS approval by State, as evidenced by the CMS authorization of
supplemental rebate agreement, attached hereto as Attachment D and incorporated
by reference.
IN WITNESS WHEREOF, this Agreement has been executed by the
parties set forth below:
Manufacturer State of Arkansas Department of Human
Services Division of Medical Services
________________________________________________________________
Name Name
Title: ____________________________ Title:
___________________________
Date: ____________________________ Date:
___________________________
NET COST
ATTACHMENT A Covered Products
The products to which this Supplemental Rebate Agreement shall
apply are the following:
|
LABEL NAME
|
NDC
|
POSITION
|
CALC TYPE
|
DISCOUNT PER UNIT
|
The Discount Per Unit is determined based on the following
variables:
The product position (1 of 1, 1 of 2 etc.) of a Supplemental
Covered Product will be determined as compared to the PDL status of the other
products listed within its Product Category.
Positioning: For [Insert Supplemental
Covered Product Name] and associated NDCs, the following terms shall
apply:
Position 1: [Insert detailed description of positioning
offer from Manufacturer] Position 2: [Insert detailed
description of positioning offer from Manufacturer] Position 3:
[Insert detailed description of positioning offer from
Manufacturer]
ATTACHMENT B
Calculation of State Supplemental Rebate
Payment
The State Supplemental Rebate per unit (SRPU) for each Covered
Product shall be calculated each quarter as follows:
1.
WAC Based GNUP: (SRPU) = WAC per
Unit minus CMS Unit Rebate Amount minus Discount Per Unit.
Or
2.
Alternative Calculation Type ['CALCULATION TYPE' (if different
than WAC Based GNUP defined above): SRPU =
[FORMULA]
(SRPU) will be greater than or equal to zero.
State Supplemental Rebate amount due = State Supplemental
Rebate amount per Unit times State Utilization.
The "Discount Per Unit" is determined based on the following
variables:
The product position (1 of 1, 1 of 2 etc.) of a Supplemental
Covered Product will be determined as compared to the PDL status of products
listed within its Product Category. Manufacturer will pay State Supplemental
Rebates on Supplemental Covered Products associated with their Product's(s')
position held from the first day in which the PDL was in effect or Supplemental
Covered Product was listed on the PDL as a preferred drug. In addition, should
the number of Supplemental Covered Products change during the applicable
quarter, for the purpose of invoicing, the preferred count shall be determined
by the number of Supplemental Covered Products during the majority of the
preferred period. By way of example; In 1st quarter,
Supplemental Covered Products A and B are preferred and invoiced at the
Discount Per Unit corresponding with the 1 of 2 position. In the
2nd quarter, Supplemental Covered Product C is added
to the PDL during the first 30 days of the quarter. Upon invoicing,
Supplemental Covered Products A, B and C will all be invoiced at the 1 of 3
position (Supplemental Covered Product A and B invoiced for 90 days and
Supplemental Covered Product C invoiced for 60 days). Conversely, in
3rd quarter, Supplemental Covered Product C is
removed from the PDL during the first 30 days of the quarter. Upon invoicing,
Supplemental Covered Products A and B will be invoiced at the 1 of 2 position
while Supplemental Covered Product C is invoiced at the 1 of 3 position
(Supplemental Covered Product A and B invoiced for 90 days and Supplemental
Covered Product C invoiced for 30 days).
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