Independent Pharmacists Raise Concerns About New Medicaid Generic Drug Reimbursement Rule

Main Category: Pharmacy / Pharmacist
Also Included In: Medicare / Medicaid / SCHIP
Article Date: 17 Oct 2007 - 6:00 PDT

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Independent pharmacists on Wednesday held a press conference in La Plata, Md., to express concerns about a rule finalized in July by CMS that will reduce Medicaid reimbursements to pharmacies for generic medications, the Washington Post reports (Johnson, Washington Post, 10/14). The rule, mandated by the Deficit Reduction Act of 2005 and scheduled to take effect on Dec. 30, seeks to ensure that Medicaid can obtain prescription drug discounts similar to those obtained by private entities.

The rule will redefine the average manufacturer price for brand-name and generic medications. States use AMPs to calculate Medicaid reimbursement rates for medications. Under the rule, the federal government will post AMPs on a Web site that consumers could access. In addition, the rule will limit the federal share of the cost of brand-name medications when at least three generic versions are available. The rule will exclude pharmacy benefit managers and pharmacies in nursing homes and assisted living facilities. According to CMS, the rule will save the federal government and states $8.4 billion over the next five years (Kaiser Daily Health Policy Report, 9/17).

Howard Schiff, executive director of the Maryland Pharmacists Association, said that the rule "hurts the pharmacists, it hurts the patients and it hurts the community." He pointed to a 2006 Government Accountability Office report finding that independent pharmacies could be reimbursed 64% of the cost to them of providing generic drugs under the rule. Pharmacists at the conference also expressed support for a bill (HR 3140) that would exclude rebates and discounts not provided to pharmacies from the calculation of AMP.

In addition, pharmacists asked House Majority Leader Steny Hoyer (D-Md.) to schedule a vote on the bill, which currently awaits consideration by the House Energy and Commerce Committee. Hoyer in a statement said that he "fully understands the concerns of independent pharmacists regarding Medicaid reimbursements and is hopeful that Congress can address the issue in a timely manner" (Washington Post, 10/14).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation© 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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