Definitions that close loopholes

Rebates do not include Manufacturer Administration Fees or fees retained by a group purchasing organization for its role in securing Rebates and/or Manufacturer Administrative Fees.

Recorded reference: Page 49

Published rationale. Exhibit 7 Section 11 on pages 47 to 49 defines the key economic terms, and the definitions run against the plan. Rebate on page 49 starts broadly as any discount or other remuneration from a manufacturer but then carves out Manufacturer Administration Fees and any fee a group purchasing organization retains, which is exactly the relabeling the model definitions are built to prevent. Specialty Drugs on page 49 are whatever list Prime or the Claim Administrator determines, subject to change, rather than a functional test. Brand and Generic on pages 47 and 48 are tied to Medi-Span multi source codes but can be overridden in the Additional Provisions of the missing BPA Addendum. Business Confidential Information on page 15 sweeps in cost and pricing information. Because the definitions actively exclude value from the rebate concept and leave classification to the vendor, the verdict is bad.

Rebates do not include Manufacturer Administration Fees or fees retained by a group purchasing organization for its role in securing Rebates and/or Manufacturer Administrative Fees.

Recorded reference: Page 49

Published rationale. On Page 49, Exhibit 7 defines Rebates to expressly exclude Manufacturer Administration Fees and fees retained by a group purchasing organization for its role in securing rebates or manufacturer fees. On Page 48, Ingredient Cost and Dispensing Fee are defined separately, while Manufacturer Administration Fees are defined on Page 48 as fees relating to rebate administration. By defining rebates and related revenues through formal contract labels rather than economic function, the document allows manufacturer compensation to be carved out and retained by the PBM and its purchasing intermediaries.

Rebates do not include Manufacturer Administration Fees or fees retained by a group purchasing organization for its role in securing Rebates and/or Manufacturer Administrative Fees.

Recorded reference: Page 49

Published rationale. Page 49 defines rebates broadly at first but then excludes manufacturer administration fees and purchasing organization retention. Page 48 defines manufacturer administration fees as negotiated fees relating to rebate administration, so economic value can be classified separately from a rebate. Page 49 permits Prime or the administrator to determine and change the specialty drug list rather than fixing the category by economic function. Page 47 relies on a pricing source's brand designation, and page 48 similarly relies on it for generic drugs. The model requires definitions closing relabeling and affiliate loopholes. Here the explicit excluded categories and unilateral specialty designation create the opposite risk, even before reviewing the absent pricing addendum.

Rebates do not include Manufacturer Administration Fees or fees retained by a group purchasing organization for its role in securing Rebates and/or Manufacturer Administrative Fees.

Recorded reference: Page 49

Published rationale. Exhibit 7 on Pages 47 through 49 defines several pharmacy terms, and those definitions leave the loopholes the model contract tries to close. On Page 49, Rebate means any discount or other remuneration attributable to member utilization, but it expressly does not include manufacturer administration fees or fees a group purchasing organization retains. Manufacturer Administration Fee, defined on Page 48, is the negotiated fee from a manufacturer, directly or through a group purchasing organization, for administering rebates. Value can be labeled a fee and fall outside Rebate. Generic Drug and Brand Drug, on Pages 47 and 48, follow the Pricing Source label, Medi-Span on the effective date, and may be otherwise designated in the omitted BPA Addendum. Specialty Drugs on Page 49 are described by use and handling, but the list is determined by Prime or Claim Administrator and may change. Affiliate is not defined by economic function. Network Participant is defined by a network contract, not by function. The model contract defines rebate, manufacturer revenue, affiliate, specialty, generic, and pharmacy by economic function so value cannot be relabeled as fees. This draft does the opposite for rebates. That is bad.

Rebates do not include Manufacturer Administration Fees or fees retained by a group purchasing organization for its role in securing Rebates and/or Manufacturer Administrative Fees

Recorded reference: Page 49

Published rationale. The model term requires rebate, manufacturer revenue, affiliate, specialty, generic and pharmacy to be defined by economic function so value cannot be relabeled to escape pass-through. The main definitions section on pages 13 through 17 contains no definition of rebate or manufacturer revenue at all. The only rebate definition is in Exhibit 7 on page 49, and it is the loophole the model targets: manufacturer administrative fees and GPO-retained fees are expressly excluded from Rebates, so the two largest alternative revenue streams escape any pass-through or guarantee tied to that term. Brand and generic are defined by Medi-Span codes on pages 47 and 48, meaning a reclassification by the pricing source changes the economics, and specialty is whatever list Prime or the Claim Administrator maintains. The definitions here do not close loopholes; they create them.