Knowledge base

Medicaid Rebate Net Price

the effective price paid for covered outpatient drugs by State Medicaid programs taking into account the manufacturer rebates received by States. The basic rebate for brand name drugs is the greater of 15.1 percent of the Average Manufacturer Price AMP, or the difference between AMP and Medicaid best price. Rebates for generic drugs are 11 percent of the Average Manufacturer Price AMP. Manufacturers must pay a supplemental rebate on brand name drugs for which the AMP increases faster than the rate of inflation based on the consumer price index. Fraud often involves misclassifying the drug as generic, or falsifying the AMP or Best Price, which would increase the net price to the State Medicaid programs.

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