WHAT IT MEANS AND WHY IT'S IMPORTANT — Retail pharmacies scored a big victory in the Centers for Medicare and Medicaid Services rule, which puts the kibosh on pricing policies that would have severely affected retail pharmacies' ability to make money from generic drugs, and thus forced them to turn away Medicaid patients.
(THE NEWS: NACDS, NCPA claim pharmacy victory after withdrawal of Medicaid program provisions. For the full story, click here)
The average manufacturer price provisions would have caused pharmacies to lose money every time they dispensed Medicaid prescriptions for generic drugs. By contrast, the healthcare-reform law, passed last year and signed into law in March, sets FULs on Medicaid reimbursements at 175% of AMP, which National Association of Chain Drug Stores president and CEO Steve Anderson cited as an improvement.
Luckily, in November 2007, the NACDS and the National Community Pharmacists Association obtained an injunction against the provisions. As a result, according to the NACDS, pharmacies have saved more than $5.3 billion in cuts since then. The injunction also prevented the closure of more than 11,000 pharmacies that otherwise would have had to stop serving low-income patients or would have had to dispense Medicaid prescriptions at a loss. For independent pharmacies in particular, which have been under pressure throughout the country, the effects of the provisions likely would have been devastating, to say nothing of the countless low-income patients who would risk losing access to pharmacy services.