§ 423.2760 Audits.

(a) Manufacturer audits of TPA data. (1) An agreement holder may conduct periodic audits, no more often than annually, of the TPA data and information used to determine discounts for applicable drugs covered by the agreement holder's Manufacturer Discount Program agreement, directly or through third parties. (2) The agreement holder must provide the TPA with 60 calendar days' notice of the reasonable basis for the audit and a description of the information required for the audit. (3) The audit is limited as follows: (i) The data provided to the agreement holder conducting the audit is limited to a statistically significant random sample of data held by the TPA that were used to determine applicable discounts for applicable drugs having NDCs with labeler codes covered by the agreement holder's Manufacturer Discount Program agreement. (ii) Manufacturers are not permitted to audit CMS records or the records of Part D sponsors beyond the data provided to the TPA, which includes claim-level information. (iii) Audits must occur at a location specified by the TPA and, with the exception of work papers, audit data cannot be removed from such specified location. (iv) The auditor for the agreement holder may release only an opinion of the audit results and is prohibited from releasing other information obtained from the audit, including work papers, to its client, employer, or any other party. (b) CMS audits of manufacturers. (1) An agreement holder is subject to periodic audit by CMS no more often than annually, directly or through third parties, as specified in this section. (2) CMS must provide the agreement holder with 60 calendar days' notice of the reasonable basis for the audit and a description of the information required for the audit. (3) CMS has the right to audit appropriate data, including data related to labeler codes covered by the agreement holder's Manufacturer Discount Program agreement and related NDC last lot expiration dates, utilization, and pricing information relied on by the agreement holder to dispute quarterly invoices, and any other data CMS determines necessary to evaluate compliance with the requirements of the Manufacturer Discount Program.