M-6.1 Supplemental Rebate Program

HHSC created the Supplemental Drug Rebate Program in conjunction with the Preferred Drug List (PDL). The PDL is a list of medications recommended by the Texas Drug Utilization Review (DUR) Board and approved by the HHSC Executive Commissioner. The DUR Board considers the drug’s efficaciousness, clinical significance, cost-effectiveness, and safety when making recommendations to add drugs to the PDL. The PDL is published in January and July of each year. Medications designated as non-preferred on the PDL require prescribing providers to obtain prior authorization.

The DUR Board meets quarterly to develop criteria and standards impacting Texas Medicaid, including:

  • Developing and submitting recommendations to the PDL
  • Suggesting clinical prior authorizations on outpatient prescription drugs
  • Recommending educational interventions for Medicaid providers
  • Reviewing drug utilization across the Medicaid program

The HHSC PDL vendor notifies manufacturers of drug classes scheduled for review before each quarterly DUR Board meeting. A solicitation list is created using all the branded products on the drug class list, as well as some generic exceptions, and manufacturers' contact information is obtained from signed supplemental rebate contracts.  

Submit the Manufacturer Contact Form to request an addition to the solicitation list. The HHSC PDL vendor distributes the solicitation list to manufacturers approximately 3 months before each DUR Board meeting. This provides an opportunity for manufacturers to submit a supplemental rebate offer based on a Guaranteed Net Unit Price (GNUP), valid for 12 months. Download the form at txvendordrug.com/resources/downloads.

  • GNUP is equal to the Wholesaler Acquisition Cost (WAC) price per unit minus the Federal Unit Rebate Amount (FURA) minus the Supplemental Unit Rebate Amount (SURA).

Once HHSC makes a final decision on PDL composition, contracts are forwarded to the manufacturers for signature. HHSC signs and executes the completed contracts received from manufacturers.