Fourth Circuit Upholds New Drug Meaning in Medicaid Rebate Suit

The definition of what constitutes as a “line extension” drug under a government rebate program is within the bounds of a Medicaid statute, a federal appeals court held Wednesday.

The US Court of the Appeals for the Fourth Circuit Wednesday affirmed a lower court’s decision upholding the Centers for Medicare & Medicaid Services’ meaning of a “line extension” and “new formulation” drug in the Medicaid Drug Rebate Program.

Manufacturers in the program are subject to additional Medicaid rebates if their drug prices exceed the rate of inflation. The decision comes in a legal battle between Vanda Pharmaceuticals Inc. and the ...