As defined by the federal government,AMP might as wellstand for "Ain't My Price"instead of Average Manufacturer Price.Late last year, the Centers for Medicare& Medicaid Services (CMS) released itslong-anticipated proposed regulationon AMP to implement provisions of theDeficit Reduction Act with its perverselogic of targeting Medicaid generic drugreimbursements for $8.4 billion in cuts.
Despite numerous contacts by theNational Community Pharmacists Association,the National Association ofChain Drug Stores, the Coalition forCommunity Pharmacy Action (CCPA),and members of Congress, the CMSproposeddefinition of AMP simply willnot cover the acquisition costs ofgeneric drugs for community pharmacies.As it now stands under the proposedregulation, community pharmacieswill start losing an average of $3 to$4 for every Medicaid generic they dispenseafter July 1.
With a disincentive like that, use ofhigher-priced brand name drugsinevitably will rise. A failure to increasegeneric use will cost Medicaid $475million for every 1% of prescriptionsfilled with a brand name product thatcould be filled with a generic.
The lowest generic fill rate amongstates that do not actively promotegeneric drug use is 42%, while in stateswhere generics are promoted the rateapproaches 60%. It leaves a lot of roomfor improvement. Any budget increasesassociated with an accurately definedAMP that actually covers ingredientcost along with a realistic dispensingfee that includes overhead and professionalservices still would be offsetmany times over with increased genericuse from incentivized community pharmacists.
Many communitypharmacistswill beforced out of theMedicaid programif the regulationand thecuts take effect,resulting in reducedaccess tolifesaving medicationsfor Medicaidpatients. Ifpharmacies areforced to close asa result of thesedrastic cuts, millionsof non-Medicaid patientsalso willlose access totheir pharmacy.
If patients donot have accessto the medicinesthat control theirdiseases, you willsee higher overallcosts from increaseddoctors' visits and hospitalizations. This allegedcost-cutting move that targets pharmaciesalone is both shortsighted anddangerous.
The CCPA is working with othergroups to weigh in, and we will file ourown comments/complaints as well.Weare also working to have legislationintroduced—both federal and state—tofix AMP. We will be providing you withmore information and asking you tohelp in this fight in the days ahead.
Mr. Roberts is executive vice presidentand chief executive officer ofthe National Community PharmacistsAssociation.
The Coalition for CommunityPharmacy Action (CCPA) is analliance between the NationalAssociation of Chain Drug Stores(NACDS) and the NationalCommunity PharmacistsAssociation (NCPA), whichtogether represents more than55,000 community pharmacies.CCPA leverages the support,effort, and infrastructure ofNACDS and NCPA while engagingcommunity pharmacy to participateand advocate on issuesaffecting the industry.