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Independent Pharmacists Raise Concerns About New Medicaid Generic Drug Reimbursement Rule

Armen Hareyan's picture

Medicaid Generic Drug Reimbursement Rule

Independent pharmacists on Wednesday held a press conference in LaPlata, Md., to express concerns about a rule finalized in July by CMS that will reduce Medicaid reimbursements to pharmacies for generic medications, the Washington Post reports (Johnson, Washington Post,10/14). The rule, mandated by the Deficit Reduction Act of 2005 andscheduled to take effect on Dec. 30, seeks to ensure that Medicaid canobtain prescription drug discounts similar to those obtained by privateentities.

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The rule will redefine the average manufacturerprice for brand-name and generic medications. States use AMPs tocalculate Medicaid reimbursement rates for medications. Under the rule,the federal government will post AMPs on a Web site that consumerscould access. In addition, the rule will limit the federal share of thecost of brand-name medications when at least one generic version isavailable. The rule will exclude pharmacy benefit managers andpharmacies in nursing homes and assisted living facilities. Accordingto CMS, the rule will save the federal government and states $8.4billion over the next five years (Kaiser Daily Health Policy Report, 9/17).

Howard Schiff, executive director of the Maryland Pharmacists Association, said that the rule "hurts the pharmacists, it hurts the patients and it hurts the community." He pointed to a 2006 Government Accountability Officereport finding that independent pharmacies could be reimbursed 64% ofthe cost to them of providing generic drugs under the rule. Pharmacistsat the conference also expressed support for a bill (HR 3140) that would exclude rebates and discounts not provided to pharmacies from the calculation of AMP.

Inaddition, pharmacists asked House Majority Leader Steny Hoyer (D-Md.)to schedule a vote on the bill, which currently awaits consideration bythe House Energy and Commerce Committee.Hoyer in a statement said that he "fully understands the concerns ofindependent pharmacists regarding Medicaid reimbursements and ishopeful that Congress can address the issue in a timely manner" (Washington Post, 10/14).

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