Discarded Drug Reports

Published 11/15/2024

Updated 11/15/2024. For the most up-to-date information on Discarded Drug Reports or calculation information, please visit the CMS Discarded Drugs page.

The Discarded Drug Report will be provided annually to each manufacturer of a refundable single-dose container or single-use package drug (as defined in section 1847A(h)(8) of the Act) with a report for each calendar quarter. The Discarded Drug Report will contain: (1) information on the total number of billing units of the refundable drug, if any, that were discarded and (2) the refund amount due for each calendar quarter, if applicable.

The refund amount is the amount by which that product (i.e., discarded units times the payment limit) exceeds the applicable percentage of the estimated total allowed charges for the drug for a given quarter, which is required to be at least 10 percent of total charges for the drug in a given calendar quarter (42 CFR 414.940). Medicare Part B drug payment limits are published and effective on a quarterly basis. CMS uses certain ASP-based payment limits to calculate the refund (refer to example 87 FR 69727) due for each quarter by:

  • Step (1): Multiplying the total number of discarded drug units based on the JW modifier for applicable claims during the quarter and the drug’s payment limit, as determined under section 1847A(b)(1)(B) or (C) of the Act, for the quarter,
  • Step (2): Multiplying the applicable percentage by the total allowed charges for the drug for the quarter, and
  • Step (3): Subtracting the product calculated in step (2) from the product calculated in step (1).

Please note: Applicable percentages vary based on refundable drugs’ unique circumstances and are described further at 42 CFR 414.940(d).

The refund amounts specified in the initial refund report must be paid no later than February 28, 2025. For subsequent years, reports consisting of information in new refund quarters and updated refund quarters (as defined in 42 CFR 414.902) will be generated on an annual basis and available in MPP with payment due by December 31 (42 CFR 414.940(b)(1)).