§ 423.2756 Manufacturer requirements.
Manufacturers that are agreement holders, as defined at § 423.2704, must comply with all requirements of this section.
(a) Manufacturer invoicing. CMS will—
(1) Calculate the amounts owed for applicable discounts for applicable drugs having NDCs with a labeler code covered by the agreement holder's Manufacturer Discount Program agreement;
(2) Itemize invoices at the NDC level;
(3) Invoice the agreement holder on a quarterly basis, consistent with the published invoicing calendar; and
(4) Invoice manufacturer discount amounts from accepted PDE data for 37 months following the end of the benefit year.
(b) Requirement for timely payment. (1) Agreement holders that are invoiced in accordance with paragraph (a) of this section are required to pay invoiced amounts within 38 calendar days of receipt of the invoice, in the manner specified by CMS, except as specified in paragraphs (b)(2) and (3) of this section.
(2) If an invoice deadline falls on a Saturday, Sunday, or legal holiday, the payment timeframe is extended to the first day thereafter which is not a Saturday, Sunday, or legal holiday.
(3) Agreement holders are not permitted to withhold payment for any invoiced amount, including a disputed amount while a dispute is pending under § 423.2764, except when the basis for the dispute is that the invoiced amount does not correspond to NDCs of labeler codes covered by the agreement holder's Manufacturer Discount Program agreement. If payment is withheld in such an instance, the agreement holder must notify the TPA within 38 calendar days of the manufacturer's receipt of the applicable invoice that payment is being withheld for this reason.
(c) Reporting requirements—(1) General. Agreement holders are required to collect, have available, and maintain appropriate data related to the labeler codes covered by their Manufacturer Discount Program agreement, and maintain such data for a period of not less than 10 years from the date of payment of the invoice.
(2) Manufacturer ownership. Agreement holders must—
(i) Provide and attest to ownership and other data, in the form and manner specified by CMS, as necessary for CMS to determine eligibility for and implement the discount phase-ins described at § 423.2716;
(ii) Notify CMS of a change in their ownership no later than 30 calendar days after the agreement holder executes a legal obligation for such an arrangement and no later than 45 calendar days prior to such change in ownership taking effect; and
(iii) If the agreement holder covers the FDA-assigned labeler code(s) of another manufacturer by its Manufacturer Discount Program agreement in accordance with § 423.2708(b)(2), comply with the requirements of paragraphs (c)(2)(i) and (ii) of this section with respect to such other manufacturer.
(3) Labeler codes. (i) An agreement holder is required to cover by its agreement all labeler codes assigned by the FDA to the agreement holder that contain NDCs for the agreement holder's applicable drugs and selected drugs.
(ii) Consistent with § 423.2708(b)(2), an agreement holder may cover by its Manufacturer Discount Program agreement applicable drugs or selected drugs with labeler code(s) assigned by the FDA to another manufacturer, provided the other manufacturer has not executed and does not have in effect its own Manufacturer Discount Program agreement in accordance with § 423.2708(b)(1).
(iii) Agreement holders must provide to CMS:
(A) All labeler codes assigned by the FDA to the agreement holder that contain NDCs for the agreement holder's applicable drugs and selected drugs, consistent with paragraph (c)(3)(iv) of this section.
(B) All labeler codes assigned by the FDA to another manufacturer that the agreement holder covers by its Manufacturer Discount Program agreement and for which the agreement holder agrees to pay discounts.
(iv) Agreement holders must provide labeler code(s) newly assigned by the FDA to the agreement holder to CMS no later than 3 business days after receiving written notification of the labeler code(s) from the FDA, and in advance of providing any NDCs associated with such newly assigned labeler codes to electronic database vendors.
(v) Agreement holders must maintain the list of labeler codes covered by their Manufacturer Discount Program agreement, in the manner specified by CMS. Failure to update labeler codes covered by a Manufacturer Discount Program agreement in accordance with the requirements in this section and applicable CMS guidance does not change an agreement holder's obligation to pay invoiced amounts for applicable drugs.
(4) FDA and related records. (i) Agreement holders must:
(A) Ensure that all of their FDA-assigned labeler codes that contain NDCs for any of their applicable drugs or selected drugs are properly listed on the FDA NDC Directory;
(B) Electronically list all NDCs of their applicable drugs or selected drugs with the FDA in advance of commercial distribution of the product(s);
(C) Maintain up-to-date electronic FDA registrations and listings of all NDCs, including the timely removal of discontinued NDCs from the FDA NDC Directory; and
(D) Maintain up-to-date listings with electronic database vendors to whom they provide their NDCs for pharmacy claims processing.
(ii) If such agreement holder's Manufacturer Discount Program agreement covers labeler code(s) that are assigned by the FDA to another manufacturer that participates in the Manufacturer Discount Program in accordance with § 423.2708(b)(2), the agreement holder must ensure that the requirements of this section are met with respect to such labeler codes.
(d) Transfer of labeler codes. Agreement holders are permitted to transfer labeler code(s) from one Manufacturer Discount Program agreement to another provided that the transfer is consistent with the requirements of this subpart and the Manufacturer Discount Program agreement and is approved by CMS.