Fourth Circuit Tests Meaning of New Drug for Rebate Program

Judges at the US Court of the Appeals for the Fourth Circuit Wednesday questioned the interpretation of a “line extension” drug under a government rebate program and if a rule defining its meaning is contrary to law.

Vanda Pharmaceuticals Inc. and the Department of Justice faced a three-judge panel answering inquiries about the Medicaid Drug Rebate Program and if a trial court was right to uphold the Centers for Medicare & Medicaid Services’ meaning on “line extension” and “new formulation” drugs in the program.

Manufacturers in the Medicaid Drug Rebate Program are subject to additional Medicaid rebates if their drug ...