Texas Proposes Repeal of Price Reporting Requirement

By Alan M. Kirschenbaum –

The October 30, 2015 Texas Register contained a proposed regulation published by the Health and Human Services Commission (HHSC) that would repeal a burdensome price reporting requirement for drug manufacturers.  In order to have a drug included on the Texas fee-for-service Medicaid formulary, manufacturers must submit to the Texas Vendor Drug Program a Certification of Information form containing, among other things, information on prices (or price ranges) to specified customer categories.  Since March 2013, Texas regulations have required that, if the initially reported price range changes, a manufacturer must submit an update consisting of the revised price range plus a calculated weighted average price.  Texas has used these reported prices to establish Medicaid ingredient cost reimbursement rates for pharmacies.  The weighted average price calculation for Texas differs from that of the average prices reported to the Medicaid Drug Rebate Program, Medicare Part B, and the Department of Veterans Affairs (which in turn differ from each other), and has therefore added to drug manufacturers’ already substantial price reporting burden.

Under the proposed regulation, manufacturers would no longer be required to submit price updates, unless requested by HHSC.  (See proposed TAC 354.1921(a)(c)(1))  That is because Texas will no longer be using manufacturer-reported prices to establish Medicaid ingredient cost reimbursement, but will instead use the National Average Drug Acquisition Cost (NADAC) published monthly by CMS based on actual pharmacy invoice surveys.  (See TAC 355.8541(a)(1))  The preamble explains (at page 7506) that, if no NADAC is published for a drug, HHSC will use WAC minus a percentage.

HHSC will hold a public hearing on this proposed regulation on November 23, and comments on the proposal may be submitted through November 30.  The regulations would become effective in the spring of 2016.