Arizona Did Not Bill Manufacturers for Some Rebates for Drugs Dispensed to Enrollees of Medicaid Managed-Care Organizations

When Arizona billed manufacturers for rebates for pharmacy and physician-administered drugs, it did so correctly. However, Arizona did not bill for and collect from manufacturers estimated rebates of $36.7 million ($25.6 million Federal share) for physician-administered drugs. For drugs that were eligible for rebates, Arizona did not bill for estimated rebates of $18.3 million (Federal share) for single-source and top-20 multiple-source physician-administered drugs. For drugs that may have been eligible for rebates, Arizona did not bill for estimated rebates of $7.3 million (Federal share) for other physician-administered drugs. Arizona did not always bill for and collect from manufacturers rebates because it did not have a system edit to ensure that National Drug Codes (NDCs) or valid NDCs were submitted for physician-administered drugs before October 1, 2012. Even after Arizona implemented the edit on October 1, 2012, this edit did not ensure that NDCs or valid NDCs were captured for all physician-administered drugs.