The National Association of Chain Drug Stores and the National Community Pharmacists Association have called on the Centers for Medicare & Medicaid Services (CMS) to rethink proposed cuts in drug reimbursement.


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NACDS, NCPA give thumbs-down to Medicaid reimbursement cuts

April 15th, 2013

ARLINGTON, Va. – The National Association of Chain Drug Stores and the National Community Pharmacists Association have called on the Centers for Medicare & Medicaid Services (CMS) to rethink proposed cuts in drug reimbursement.

NACDS and NCPA said Friday that they have sent a letter to CMS to express their concerns about the proposal to reduce Medicaid drug reimbursement, which was included in President Barack Obama's 2014 budget.

The pharmacy trade groups contend that CMS should modify and complete already proposed regulations to set future federal upper limits (FULs) for reimbursement of most generic drugs, rather than pursuing new Medicaid cuts that could curtail patient access to prescription drugs and pharmacy services.

"While the goal of this provision may be to decrease Medicaid costs, we believe it may in fact reduce access to prescription drugs and pharmacy services for Medicaid patients, resulting in increased overall health care expenditures," NACDS president and chief executive officer Steve Anderson and NCPA CEO B. Douglas Hoey stated in the letter to CMS.

According to NACDS and NCPA, the new proposal is premature because CMS hasn't completed its rulemaking process for establishing new FULs based on average manufacturer price (AMP). The FULs would apply to most generic drugs, or "multi-source" generics.

The two groups note that CMS has published draft FULs for hundreds of drugs, but the proposed payment rates require significant adjustment. Both associations have objected to the draft FULs, explaining that they would pay pharmacies well below their costs of serving Medicaid patients and that such cuts could force some pharmacies out of the Medicaid program and undermine the incentive to dispense cost-saving generics.

Fourteen senators and 40 representatives have written to CMS in objection to its draft FULs, NACDS and NCPA reported.

"Additional efforts by CMS are necessary to ensure that pharmacies are not reimbursed below their costs using the reimbursement formula created by the Affordable Care Act," Anderson and Hoey stated in their letter. "We urge the agency to utilize the rulemaking process to implement the Medicaid pharmacy provisions in a manner consistent with congressional intent, rather than pursuing policies that would further cut pharmacy reimbursement."

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