NCPA Urges Key House Committees to Take Action on Medicare Generic Drug Payment Legislation

Published Online: Thursday, June 26, 2014
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ALEXANDRIA, Va. (June 26, 2014) – In its efforts to advance the Generic Drug Pricing Transparency Act (H.R. 4437), the National Community Pharmacists Association (NCPA) is asking the leaders of the House Energy and Commerce Committee and House Ways and Means Committee to “closely examine and ultimately consider this common sense bipartisan legislation.”

In a letter to the panels’ Chairmen and Ranking Members, NCPA CEO B. Douglas Hoey, RPh, MBA wrote, “Even though pharmacists are reimbursed for generic prescriptions via Maximum Allowable Cost (MAC) lists, these lists are not updated on a regular basis which frequently results in pharmacists being reimbursed below their acquisition cost for various medications particularly in today’s pharmaceutical marketplace which has recently been plagued with a series of generic medication price spikes.”

Community pharmacies’ cost of acquiring many generic drugs has increased 1000% or more virtually overnight but MAC-based reimbursements from pharmacy benefit managers (PBMs) may remain outdated for months before PBMs update payment rates and rarely do so retroactively. That often leaves community pharmacies with unsustainable losses of $60 to $100 or more per prescription.

Hoey noted in the NCPA letter that the Centers for Medicare & Medicaid Services (CMS) partially addressed the concerns of community pharmacists in this area. A recently published final rule contains a provision that takes effect in 2016 and requires PBMs to disclose to pharmacies MAC rates and to update them every seven days.

While NCPA appreciates CMS’ action, H.R. 4437 would go further by implementing the following provisions:
  • First, the legislation would establish an appeals process for pharmacies to resolve disputes over outdated MAC limits.
  • Second, it would protect patient privacy by requiring the patient’s permission before the PBM could transmit personally identifiable utilization or claims data to a PBM-owned pharmacy.
  • Third it would protect patient choice by prohibiting a PBM from requiring that a beneficiary use a retail or mail order pharmacy in which the PBM has an ownership interest.

The legislation was introduced by Reps. Doug Collins (R-Ga.) and Dave Loebsack (D-Iowa). Legislation similar to H.R.4437 has been enacted on a bipartisan basis in 16 states over the past two years.
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