NACDS pushes Congress to pass Fair Medicaid Payment legislation

ALEXANDRIA, Va. The National Association of Chain Drug Stores Tuesday urged Congress to pass the Fair Medicaid Drug Payment Act. In a letter to the leadership of the Senate and House of Representatives, NACDS outlined the impact of the Deficit Reduction Act of 2005, which included over $8 billion in cuts to Medicaid reimbursements for pharmacies.

To help combat the effects of the 2005 act—and the rule from the Centers for Medicare and Medicaid Services rule that drastically lowered the reimbursement for generic drugs—Sen. Max Baucusm, D-Mont., chairman of the Finance Committee, introduced the Fair Medicaid Drug Payment Act, which creates a fair and reasonable benchmark for Medicaid pharmacy reimbursement. The companion measure in the House of Representatives was introduced by Rep. Frank Pallone, Jr., D-N.J., chairman of the House Energy and Commerce Subcommittee on Health.

The letter read, in part, “It has been estimated that the CMS-proposed cuts to generic drug reimbursement would result in Medicaid payments to pharmacies being slashed by more than $8.4 billion over five years. This represents a 78 percent reduction in reimbursement which could result in the closing of up to 12,000 pharmacies, according to sworn court testimony by a nationally renowned pharmacoeconomics expert.

“In addition, a report by the Government Accountability Office stated that, on average, the reimbursement for many generic drug products will be one-third or more below what it costs pharmacies to purchase these drugs. No health care provider should be asked to provide services at a loss. Furthermore, to cut reimbursement of generic drugs, the most cost effective medications available, is illogical and would result in an economic disincentive for dispensing generic drugs and higher costs to the Medicaid program, an unintended effect of the DRA.”

“Medicaid beneficiaries deserve access to the cost-effective medications dispensed at their corner pharmacy, but pharmacies may be unable to effectively provide those prescription drugs at the reimbursement levels currently set under the DRA,” stated NACDS president and chief executive officer Steve Anderson. “Therefore, we urge Congress to pass the Fair Medicaid Drug Payment Act before adjourning for the year.”

The full text of the letter is available here.

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