Solution for Medicare Part D Manufacturer Discount Program (MDP)
Solution for Medicare Manufacturer Discount Program (MDP)
The Medicare Part D Coverage Gap Program is being replaced with Medicare Part D Manufacturer Discount Program as a part of implementation of the Inflation Reduction Act (IRA). That means, that manufacturers have to find a solution for the new Medicare Part D Manufacturer Discount Program.
Coverage Gap invoices will continue to be issued through 2028 for the Prescription Drug Events (PDE) that happened prior to 2025. The first invoices for the new Medicare Part Manufacturer Discount Program (MDP) were issued on May 1st, 2025.
The file formats for MDP are significantly different from those used under the Coverage Gap program. For the file details, please see TPA Invoice File Format for MDP.
As MDP removes the manufacturer liability cap during catastrophic coverage, the MDP rebates are expected to be larger than rebates paid under the Coverage Gap program. More complicated rebate criteria, which include low income beneficiaries, selected drugs, specified or specified small manufacturer classification, beneficiary out-of-pocket deductibles – required manufacturers to have a robust system in place. A system, which will do the full validation of the PDEs and offer predictive analytics to forecast manufacturer rebates liabilities for the future quarterly MDP invoices.
Standard Dispute Codes for MDP Invoice Validation
As was done in Coverage Gap, CMS provides a list of dispute codes which manufacturers can use to dispute rebates on particular PDE records.
The list of standard dispute codes is available here in PDF and Excel formats. The codes are
Reason Code Reason Description
D21 Duplicate Invoice Item
D22 Not Yet Open, Closed, or Invalid Pharmacy
D23 Not Part D Covered Drug
D24 Excessive Quantity
D26 High Price of the Drug
D27 Last Lot Expiration Date
D29 Marketing category is not NDA, BLA or NDA Authorized Generic
D33 Reported Discount for this NDC exceeds Specified or Specified Small Phase-In
D34 Reported Discount amount does not align with TrOOP Accumulator
D35 NDC is a Selected Drug
In addition to standard codes, manufacturers can also use an unlimited number of custom codes, with the reason code D99. For example, a program could check if PDE took place not earlier than January 1st, 2025, and raise the dispute code D99 otherwise.
Handling code D26 – High Price of the Drug
Correctly applying dispute code D26 – High Price of the Drug – remains as challenging, as it was for Coverage Gap dispute code D06. The issue is that the Gross Cost of the drug to Medicare is not limited by WAC, or even WAC plus margin. The Gross Cost of the drug on the PDE is the amount that PBM billed Medicare for. That cost includes the price of the drug negotiated between the plan and the pharmacy, a dispensing fee and, optionally, even sales tax.
While disputes with the code D26 based on price-to-WAC ratio will likely not reduce the requested discounts, they provide a valuable insight of the product pricing for Medicare. The manufacturer will be able to see the billed rebate amount per extended unit, to calculate the weighted ratio of discounts to WAC for a product, and thus to model future MDP exposure.
Dispute code D33 and D34
Code D33 represents a brand new calculation rule. Calculating discount amount requires taking in consideration the cost of the drug, deductible, possible low-income status of the beneficiary, checks if any invoiced products have a status of “Selected Drug”, and if these Selected Drugs are subject to rebates in a particular quarter.
Code D34 is used to detect anomalies in PDE billing details. It will play a bigger role when PDEs referring to refills of the same prescriptions will start showing up.
Relasoft Solution for Manufacturer Discount Program
Relasoft developed a “Medicare Part D Manufacturer Discount Program“ solution which utilizes all standard and a number of additional business rules. The solution comes with audit outlines of the calculation, and helps to detect anomalies covered by dispute codes D33 and D34 for the PDEs.
It is important to note, that the software comes with analytical reports, showing various aspects of product utilization over periods based either on service date, or on invoice date.
Module “Medicare Part D Manufacturer Discount Program “ is a part of Relasoft Pharma Suite, and is designed to be tightly integrated with the manufacturers ERP and other Pharma Suite modules – Medicaid and chargebacks. It also has tools to automatically detect discrepancies in plan – vendor EFT records, to submit cost center-based data to SAP in file formats friendly to SAP, and more.
Learn More
For a full overview of Relasoft’s Medicare Part D Manufacturer Discount Program solution, visit:
https://relasoft.net/medicare-part-d-manufacturer-discount-program/
Or contact: Dr. Alexander Werner
727.306.1868 x501