On Friday, January 27, the Centers for Medicare & Medicaid Services (“CMS” or “the Agency”) published its long-awaited proposed rule implementing the Medicaid pricing and reimbursement provisions of the Patient Protection and Affordable Care Act (“ACA”) and related legislation. A display copy of the proposed rule (“ACA Proposed Rule”) can be found here. The Federal Register is expected to publish its singlespaced, three column version on February 2.

The ACA Proposed Rule addresses many of the government pricing questions that drug and biologics manufacturers, wholesalers and pharmacies have been wrestling with since the passage of health care reform in March of 2010. The scope of the rulemaking is broad and does provide manufacturers with greater insight into CMS’s position on critical issues, but it also leaves many questions unanswered and will likely increase drug manufacturers’ rebate liability and cost of compliance.

CMS does not speak to the question of retroactive applicability of any of the provisions in the ACA Proposed Rule.