Pharmacy Times

CCPA Speaks Out: AMP Rule Is Still a Pressing Issue

Author: Julie Khani and Charles Sewell


Ms. Khani and Mr. Sewell are copresidents of the Coalition for Community Pharmacy Action.


In February, President Bush issued his proposed budget to Congress. In it, he called for another $1 billion to be cut from pharmacy reimbursements in the Medicaid program. If it was not clear before, it is now: we need to redouble our efforts to permanently change how pharmacies are reimbursed for Medicaid prescriptions.

To this end, the Coalition for Community Pharmacy Action (CCPA) has been at work on multiple fronts to ensure that a fair and accurate benchmark for Medicaid pharmacy reimbursement is developed as soon as possible. As we have reported before, CCPA members, the National Association of Chain Drug Stores, and the National Community Pharmacists Association won an injunction in the US District Court that prevented the Centers for Medicare & Medicaid Services (CMS) from initiating reductions in Medicaid reimbursements, previously set to begin in January 2008. Additionally, the court ruled that CMS cannot publish data related to the Average Manufacturers Price (AMP) of generic drugs until further review by Judge Royce Lamberth.

Our efforts have been boosted by several studies that demonstrate how damaging these cuts to pharmacy will be. In a recent report, Stephen W. Schondelmeyer, PharmD, PhD, director of the PRIME Institute at the University of Minnesota, indicated that CMS? proposed cuts could result in a 78% reduction in reimbursement for retail pharmacy. As a consequence, Dr. Schondelmeyer estimated that 10,000 to 12,000 pharmacies?a majority of which would be in rural or inner-city urban areas?could be forced to close over the next few years. In addition to his findings, a report by the Government Accountability Office stated that, on average, the reimbursement for many generic drug products will be 36% below what it costs pharmacies to purchase these drugs.

CCPA continues to work to ensure that pharmacies are not forced into this kind of dilemma. The court injunction granted us a brief delay, and we are taking advantage by continuing to advance fair reimbursement legislation in both the House and the Senate. On the Senate side, CCPA continues to work with Senate Finance Chairman Max Baucus (D, MT) and the rest of the committee on S 1951, the Fair Medicaid Drug Payment Act. It now has 41 cosponsors, and CCPA believes that helpful measures from the bill will be included in a Senate health care package this spring.

Two bills in the House of Representatives also provide for reasonable reimbursement to pharmacies for generic drugs dispensed in the Medicaid program. HR 3140, the Saving Our Community Pharmacies Act, was introduced by Rep Nancy Boyda (D, KS) and uses a drug?s median retail acquisition cost as the standard for reimbursement in the Medicaid program. HR 3700, the Fair Medicaid Drug Payment Act, was introduced by Energy and Commerce Health Subcommittee Chairman Frank Pallone (D, NJ) and is a companion to the Senate bill. CCPA has been able to generate >180 cosponsors between the 2 bills, and we continue to work to increase that number every day.

Although it is important for us to make the case for fair and sensible reimbursement here in Washington, we cannot do it alone. Your lawmakers need to hear from you that reasonable Medicaid payments to pharmacies are essential to maintaining access to prescription drug care for our nation?s low-income patients. Please help us to continue this fight by contacting your lawmakers today and asking them to stop the cuts to pharmacies in the Medicaid program.