---
kind: "section"
citation: "42 C.F.R. § 428.204"
title: "42"
number: "428.204"
heading: "Treatment of new formulations of Part D rebatable drugs."
url: "https://uscodex.org/cfr/42/428.204"
---

# §428.204. Treatment of new formulations of Part D rebatable drugs.


In the case of a Part D rebatable drug that is a line extension of a Part D rebatable drug that is an oral solid dosage form, the rebate amount for an applicable period is equal to the amount determined under [§ 428.201(a)(1)(i)](/cfr/42/428.201.md?p=a-1-i) for such new drug or, if greater, the alternative total rebate amount. CMS will determine the alternative total rebate amount for such new formulations according to the following:

- (a) **Identification—** of the initial drug. The initial drug that CMS will use to calculate the inflation rebate amount ratio is the initial drug identified in accordance with [§ 447.509(a)(4)(iii)(B)](/cfr/42/447.509.md?p=a-4-iii-B) of this chapter for the last quarter of the applicable period or, if an initial drug was not identified in the last quarter, the initial drug identified for a quarter most recently in that applicable period.
- (b) **Calculation of the inflation rebate amount ratio.** The inflation rebate amount ratio is equal to the per unit Part D rebate amount for the initial drug, as determined under [§ 428.202(a)](/cfr/42/428.202.md?p=a), divided by the AnMP for that initial drug for the applicable period.
- (c) **Calculation of the alternative total rebate amount.** The alternative total rebate amount is equal to the product of all of the following:
  - (1) The AnMP for the applicable period, as determined under [§ 428.202(b)](/cfr/42/428.202.md?p=b), of the Part D rebatable drug that is a line extension of a Part D rebatable drug that is an oral solid dosage form.
  - (2) **The inflation rebate amount ratio as determined under paragraph (b) of this section.**
  - (3) The total number of units dispensed under Part D identified as set forth in [§ 428.203](/cfr/42/428.203.md).

## Notes

### Amendments

[89 FR 98588, Dec. 9, 2024, as amended at 90 FR 20808, May 16, 2025]

### Authority

Authority: 42 U.S.C. 1395w-114b, 1302, and 1395hh.

### Source

Source: 89 FR 98588, Dec. 9, 2024, unless otherwise noted.

### Amendments

[89 FR 98588, Dec. 9, 2024, as amended at 90 FR 20808, May 16, 2025]