Abstract
The Medicaid Drug Rebate Program (MDRP) is a federal-state partnership program that aims to control prescription drug costs through contractual agreements enabling manufacturers to secure Medicaid coverage for their drugs by paying rebates to state Medicaid agencies. All states participate in MDRP, helping Medicaid beneficiaries obtain affordable access to nearly all Food and Drug Administration-approved outpatient drugs. Although the program has achieved significant cost savings for Medicaid, notable False Claims Act violations in recent years have called into question the program's operational robustness, particularly regarding the accuracy of data which underpin rebate calculations. In 2024, the Centers for Medicare and Medicaid Services made significant, necessary changes to the program; however, gaps remain. In this commentary, we review the program's operational structure, highlight ongoing challenges regarding drug misclassification and price verification, and propose recommendations for future policymaking. Further scrutiny of reporting compliance may be key to maintaining program integrity.