WASHINGTON The National Association of Chain Drug Stores applauded Rep. Frank Pallone, Jr., D-N.J., chairman of the House Energy and Commerce Subcommittee on Health, for his continued support of pharmacy as he introduced H.R. 3700, the House companion bill to S. 1951, The Fair Medicaid Drug Payment Act of 2007, which was introduced by Finance Committee Chairman Max Baucus, D-Mont.
The legislation would repair several damaging policies set by the Deficit Reduction Act of 2005 and its misapplication by the Centers for Medicare and Medicaid Services, which imposed deep payment cuts on pharmacists for generic drugs dispensed to Medicaid beneficiaries. The final rule issued by CMS on Medicaid prescription drug reimbursement established an average manufacturer price as the basis for the calculation of Medicaid payments to pharmacies for “multiple source” (primarily generic) prescription medications.
Pharmacy leaders predict the cost-cutting provisions of the DRA—along with the new drug pricing system—will cost U.S. pharmacies a total of $8 billion in reduced Medicaid dispensing fees over the next five years. They also assert the new payment model—which is set to take full effect Jan. 30, 2008—will end up costing U.S. taxpayers more for Medicaid prescriptions by reducing financial incentives for pharmacists to dispense generics.
“Medicaid patients are often our nation’s most vulnerable health care consumers, and they rely on pharmacists to play an important role in the delivery of much-needed medications,” said Pallone. “The Fair Medicaid Drug Payment Act of 2007 will help ensure that these patients are able to fill their prescriptions at the pharmacy they choose, and will prevent pharmacists who serve high Medicaid populations from closing their doors.”
The legislation in both houses encourages the use of generics through important pharmacy provisions such as an improved definition of AMP that better reflects acquisition costs in community retail pharmacies; use of a pricing benchmark based on average acquisition costs; and setting federal upper limits (FULs) only when there are three or more (rather than two or more) equivalent drug products on the market.
“We praise Chairman Pallone for his leadership and initiative to develop a legislative solution that will help maintain the current level of vital pharmacy services available in low-income communities,” said NACDS president and chief executive officer Steve Anderson. “With prior bold moves by friends of pharmacy, and now the support of committee and subcommittee chairmen in both chambers of Congress, we continue to make progress on our all-levels, all-branches of government campaign to mitigate these cuts and their effects on pharmacy and patients.”