HHS Takes Aim at Drug Misclassification in Medicaid Rebates

The Department of Health and Human Services is moving to crack down on manufacturers’ misclassification of drug products under the Medicaid Drug Rebate Program.

A proposed rule (RIN 0938-AU28) issued Tuesday aims to prevent the misclassification of drugs, particularly when brand-name drugs are inaccurately labeled as generic, which can result in lower rebate payments for states. This causes states to overpay for these medications, escalating Medicaid’s drug costs, and potentially affecting the program’s ability to supply necessary medications to beneficiaries.

The drug rebate program helps make outpatient drugs more affordable for Medicaid enrollees. Under the program, drug manufacturers ...