Judge Grants Preliminary Injunction Against Rule That Would Revise Medicaid AMP For Rx Drugs

Main Category: Medicare / Medicaid / SCHIP
Article Date: 19 Dec 2007 - 5:00 PDT

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U.S District Court Judge Royce Lamberth in Washington, D.C., on Friday granted a preliminary injunction that prohibits HHS from adopting a new method for calculating the average manufacturer price for prescription drugs covered by Medicaid, Dow Jones reports (Wisenberg Brin, Dow Jones, 12/17).

The rule would have redefined the AMP for brand-name and generic medications. States use AMPs to calculate Medicaid reimbursement rates for medications. Under the rule, the federal government would have posted AMPs on a Web site that consumers could access. In addition, the rule would have limited the federal share of the cost of brand-name medications when at least one generic version is available. The rule would have excluded pharmacy benefit managers and pharmacies in nursing homes and assisted living facilities. According to CMS, the rule would have saved the federal government and states $8.4 billion over the next five years (Kaiser Daily Health Policy Report, 10/16).

A spokesperson for the court said that the order will not be posted before Tuesday afternoon because Lamberth is allowing the government time to object to the exact terms as proposed by the plaintiffs, the National Association of Chain Drug Stores and the National Community Pharmacists Association. The rule was set to take effect on Jan. 30, 2008 (Dow Jones, 12/17).

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