A federal initiative administered by the Centers for Medicare & Medicaid Services (CMS), the Medicaid Drug Rebate Program (MDRP) offsets over $40B in annual public drug expenditures by requiring pharmaceutical manufacturers to pay rebates to state and federal governments in exchange for Medicaid coverage. This allows state programs to keep beneficiary copays free or nominal, often holding out-of-pocket costs between $1 and $8.
The MDRP helps ensure broad access to prescription drugs by requiring state Medicaid programs to cover the cost of covered outpatient drugs from participating manufacturers that meet applicable federal requirements, subject to certain statutory exceptions and permissible coverage restrictions.
In return, participating manufacturers provide rebates that help reduce Medicaid’s prescription drug costs, including rebates that account for the “best price” offered to certain other purchasers. This framework gives Medicaid beneficiaries access to a broad range of needed medications while helping states and the federal government safeguard taxpayer dollars.
MDRP’s Technical Infrastructure: The Medicaid Drug Programs (MDP) Application
The technology that supports this system is the Medicaid Drug Programs (MDP) application. It includes a suite of tools, including the Medicaid Drug Rebate (MDR) system, Federal Upper Limit pricing (FUL) processes, a branded prescription drug fee program, and the annual Drug Utilization Review (DUR) survey and report, and state drug utilization data.
One of the MDP app’s main priorities is facilitating timely, accurate data reporting. Modernizing these systems creates a secure path for the government to purchase drugs responsibly, makes administrators’ jobs easier, and ensures the American people maintain affordable access to their medications.
How Data Reporting Technology Impacts State Admins and Budget Stability
The prescription drug rebate cycle involves a quarterly data exchange between state Medicaid agencies, 780 participating drug manufacturers, and CMS.
State administrators track and report drug utilization data for their populations, and pharmaceutical companies submit corporate pricing details. CMS processes these data streams, calculates the final rebate totals, and sends the data back to the states, which then invoice the manufacturers.
Now, imagine it’s the final week of a fiscal quarter. A state administrator sits at a desk with multiple screens open, trying to cross-reference mismatched drug pricing files. The clock is ticking toward a strict statutory deadline, after which the state loses its legal right to dispute invoice calculations. This end-of-quarter scramble can become a reality if public servants have to rely on outdated technology.
When data reporting tools encounter code errors or slow processing times, the fiscal risks are immediate. If rebates aren’t calculated accurately and on time, states lose potentially millions of dollars in refunds they are entitled to receive from pharmaceutical manufacturers.
For smaller states, these manufacturing rebates can make or break an annual budget. Without this money, local programs may face shortfalls, while the multi-billion-dollar pharmaceutical companies remain financially insulated. In this context, operational speed and data integrity are forms of fiscal responsibility.
Modernizing and Building New Components of the MDP App
Our team partnered with CMS to modernize and build new features for the MDP system. Both our completed and ongoing work layers policy expertise with human-centered research and engineering to deliver tools that make Medicaid drug data reporting efficient, accurate, and compliant.
Streamlining Unit Testing Workflows to Save Time and Resources
To improve the rebate calculation process, the team decided to optimize the legacy system rather than start from scratch. Engineers combed through the codebase, refactoring the logic and expanding automated unit tests to verify mathematical accuracy.
This code optimization unlocked a major process efficiency. Previously, the calculation cycle required a week-long dry run followed by a week-long production run, consuming two weeks of system uptime and staff attention. We were able to verify calculations directly within the code, compressing this overhead into a three-day production run.
This change cuts down the administrative burden on state and federal teams, allowing them to process invoices quickly and protect public funds without the stress of extended system delays.
Keeping Pace with Evolving Policies
The MDRP is governed by several federal statutory mandates, from its establishment under the Omnibus Budget Reconciliation Act of 1990 (OBRA '90) and the Social Security Act to modern expansions under the Affordable Care Act. As you can imagine, adaptability is a big challenge for the technology supporting it.
As a Health Policy Expert embedded within the MDP project, my role is to translate these legal requirements into insights our engineering and design teams can use to build exactly what CMS needs.
For example, CMS adopted an updated rule in September 2024 aimed at preventing drug misclassification. The new regulation provided CMS with the enforcement authority to suspend a non-compliant labeler or specific drug product from the program.
Our team built the necessary system functionality inside the MDP application to support these enforcement actions. I led the requirements-gathering process, breaking down the regulatory mechanics so the system could track products and freeze reporting omissions.
Our human-centered designers worked with engineers to bring these features to life in a unified workflow. The designers created clear search filters and status pages so state administrators and drug manufacturers could instantly verify which products were suspended, while our developers built the validation logic into the application backend.
Centralizing the Drug Utilization Review Annual Report
Each year, states are required to report their practitioners' prescribing habits, cost savings, and operations via the Medicaid Drug Utilization Review Report Survey.
Managing public health data becomes far more reliable when the collection tools live exactly where the work happens. Our team is building a new survey framework for the annual Drug Utilization Review (DUR) Report Survey that’s embedded directly within the MDP application.
Historically, state administrators completed this mandatory review via an external Qualtrics survey. Every time they needed to report data, state contacts had to follow an external link, input form details outside their regular application environment, and submit data into a separate silo.
The recovery cost of context switching between screens like this is longer than most people realize. A study by Qatalog and Cornell University found that it takes an average of 9.5 minutes to return to a productive workflow after toggling to a different digital application.
Bringing the DUR survey inside the main MDP application means state administrators will no longer have to manage disconnected reporting environments, and CMS personnel will be able to pull data records instantly for reporting.
This frees up time for both sides to focus more on tasks that contribute to their agencies’ missions and the communities they serve.
Coforma was the prime partner for two phases of the MDP contract. Phase 2 work is ongoing as of publication in 2026. We collaborated with our excellent subcontracting partners—For People, ICF, Oddball, Stratiform Digital, Element Solutions, and Blue Tiger—at various phases of the project.
