Published Online: Monday, October 1, 2007

New legislation introduced by Senate Finance Committee Chairman Max Baucus would short-circuit plans by the Centers for Medicare & Medicaid S e r v i c e s (CMS) that w o u l d severely reduce reimbursement to pharmacists for generic drugs dispensed to Medicaid patients. Instead of reducing incentives for the use of more costeffective generic medicines, Baucus' bill would promote the use of generics, "saving the Medicaid program money and ensuring continued beneficiary access to crucial pharmacy services," supporters of the legislation said.

Among other things, the bill would establish a new definition of average manufacturer price that pharmacy leaders say will better reflect acquisition costs in community retail pharmacies. It would also require the use of a "pricing benchmark" based on average acquisition costs and would set federal upper limits on pharmacy payments only when there are 3 or more equivalent drug products on the market.

Baucus' proposed solution to pharmacy's impending generic-reimbursement crunch drew immediate applause from chain-drug industry leaders who have been calling for congressional action to address the problem. "We praise the leadership of Chairman Baucus, who has worked in partnership with the National Association of Chain Drug Stores (NACDS) 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 Steven C. Anderson. "The introduction of this bill with strong bipartisan support is a critical step in ensuring that much needed relief is provided to low-income Americans and neighborhood pharmacies across the nation."

The legislation drew solid bipartisan support on Capitol Hill, a fact that Anderson said "demonstrates the urgency of turning back the unprecedented level of cuts facing community pharmacies and the low-income Americans they serve."

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