Medicaid AMP Ruling a Victory for Patients, Pharmacists

The Centers for Medicare & Medicaid Services issued a proposed rule that promises pharmacies fair reimbursement for generic drugs.

A revision to the reimbursement formula for Medicaid’s prescription drug benefit earned high praise from 2 groups representing the pharmacy industry, the National Association of Chain Drug Stores (NACDS) and the National Community Pharmacists Association (NCPA).

Issued September 3, 2010, the proposed rule withdraws certain elements of the average manufacturer price (AMP) rule, which determines how pharmacies are reimbursed for generic prescriptions under Medicaid.

“The move to withdraw these provisions is a victory for patient care as it is delivered in America’s pharmacies every day,” read a joint statement by NACDS president and chief executive officer Steven C. Anderson, IOM, CAE, and NCPA acting executive vice president and chief executive officer Douglas Hoey, RPh.

The revision of the AMP rule was a hard-fought victory for both organizations, which filed a lawsuit against the Centers for Medicare & Medicaid Services (CMS) in 2007 for finalizing measures that would have set the federal upper limit for reimbursement of generic drugs at 250% of the weighted AMP.

The new proposal eliminates existing provisions that define AMP, federal upper limits, and “multiple source drugs.” It works in tandem with measures in the Patient Protection and Affordable Care Act that aim to redefine these values to ensure pharmacies are reimbursed for the true cost of generic medicines.

CMS will set federal upper limits at no less than 175% of the weighted AMP, which will be determined on the basis of utilization and will exclude prices paid by mail-order pharmacies. “The end result is not an increase in reimbursement to pharmacy,” Hoey and Anderson said, “but rather the lessening of cuts that previously would have involved pharmacies selling most generic drugs at a loss.”

CMS will accept public comments on the proposal until October 4, 2010. Comments can be submitted electronically at www.regulations.gov using the file code CMS-2238-P2.

For other articles in this issue, see:

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  • Pediatricians Back Mandatory Flu Vaccines for Health Workers
  • Pharmacy Times iPad App Unveiled