A key Senate committee has made Medicaid pharmacy reimbursement a priority as it drafts health care legislation, but the chain drug industry must keep a close watch as lawmakers work out the details for reckoning drug prices, according to the National Association of Chain Drug Stores.


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NACDS vigilant as Congress addresses Rx reimbursement

September 11th, 2009

ALEXANDRIA, Va. – A key Senate committee has made Medicaid pharmacy reimbursement a priority as it drafts health care legislation, but the chain drug industry must keep a close watch as lawmakers work out the details for reckoning drug prices, according to the National Association of Chain Drug Stores.

NACDS said Thursday that the Senate Finance Committee this week released a framework document for health care reform legislation that includes a provision to reform pharmacy reimbursement for Medicaid prescription drugs.

Though the association welcomed the move, it expressed concern about the committee's formula for setting federal upper payment limits (FULs) for generic drugs, including the definition of average manufacturer price (AMP).

"We appreciate that the inclusion of a provision to reform Medicaid pharmacy reimbursement remains a priority," NACDS president and chief executive officer Steve Anderson said in a statement. "However, we look forward to working with Congress on the details of this provision, as we remain extremely concerned that an insufficient 'multiplier' for establishing FULs for generic drugs could have extremely negative consequences for pharmacies and their low-income patients. These include possibly jeopardizing access to patient care in pharmacies and undermining incentives to dispense generic medications, which are so critical to reducing prescription drug expenditures."

NACDS said the committee's framework describes a 175% multiplier — lower than the 300% multiplier proposed in the previous Congress — and that the association looks forward to further discussions with lawmakers on the issue. Yet NACDS applauded the framework’s adoption of a weighted-average AMP rather than the lowest AMP to set FULs.

"The use of a weighted average AMP would deliver a much needed improvement that takes into account the wide range of market prices for generic drugs," Anderson explained. "In another related issue, we look forward to learning more about the definition of AMP under consideration by the committee, as it is essential that this definition only takes into consideration drug sales related to the retail class of trade to prevent the inappropriate skewing of this model."

Anderson also remarked that NACDS is encouraged that provisions for enhancing pharmacist-provided medication therapy management (MTM) and ensuring patient access to durable medical equipment (DME) are included in bills under consideration in Congress. Along with reform of Medicaid pharmacy reimbursement, those provisions "are essential for cost-effective and high-quality patient care" and are consistent with the NACDS Principles of Health Care Reform, he noted. 

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