The Centers for Medicare and Medicaid Services (CMS) should stop publishing draft federal upper limit (FUL) lists based on average manufacturer price (AMP) until a formal rule-making process on AMP is completed, says the National Association of Chain Drug Stores.


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CMS asked to hold back on publishing FULs

February 27th, 2012

ALEXANDRIA, Va. – The Centers for Medicare and Medicaid Services (CMS) should stop publishing draft federal upper limit (FUL) lists based on average manufacturer price (AMP) until a formal rule-making process on AMP is completed, says the National Association of Chain Drug Stores.

To date, CMS has issued four draft FUL lists.

“In addition to the significant reductions in pharmacy reimbursement that would result from implementation of FULs based on AMP, we continue to see great variability in FULs from month to month, the tendency of FULs to appear and disappear from draft FUL lists, the lack of correlation between AMP and pharmacy acquisition cost, and the prevalence of FULs that have been calculated in a manner that is inconsistent with the requirements of the Patient Protection and Affordable Care Act (ACA),” NACDS stated in a letter to CMS.

NACDS has long expressed concerns about using AMP as a basis for pharmacy reimbursement, asserting it is not a price paid in the marketplace but rather a benchmark to determine manufacturer rebates in the Medicaid program. NACDS and the National Community Pharmacists Association (NCPA) won a preliminary injunction in federal court in 2007 to block CMS’ approach to pharmacy reimbursement with the AMP model; CMS eventually withdrew all of the contested rules.

“As part of our comments provided to CMS on October 20, 2011, NACDS attached a list of specific FULs that appear to have been calculated inaccurately, including issues such as calculating FULs using prescription and over-the-counter products, inappropriate mixing of products that are not therapeutically equivalent in the same product group or mismatched package sizes. Despite the fact that this list was provided to CMS, these FULs continue to appear on draft FUL lists, including the most recent draft list issued on January 17, 2012. We have provided a list again as part of our comments and urge CMS to review these materials to ensure only FULs that are calculated according to the requirements of the ACA are included on FUL lists."

In the letter signed by vice president of public policy Julie Khani, NACDS emphasized that since the AMP rule-making process is ongoing, FUL lists should not be published until that process is completed. “Based on our initial review [of the proposed rule], it seems unquestionable there is no uniformity in the way manufacturers currently are calculating and reporting AMPs” the letter stated. “As a result, NACDS believes the draft FULs, calculated without regulatory guidance and seemingly inaccurate, should neither be made available for nor used as a basis for pharmacy reimbursement. No further draft FUL lists should be published before a final AMP rule is effective.

“At the completion of rule-making, CMS should again issue a draft FUL list, subject to the final AMP rule, for public review and comment,” NACDS says.

The association also points out the importance of providing clear guidance to states on accurate dispensing fees before the use of AMP-based FULs.

“In order to ensure that pharmacies are not reimbursed below the cost to acquire and dispense prescription medications to Medicaid patients, CMS should make clear to states that, in order to maintain patient access to pharmacies, dispensing fees must be reviewed and adjusted to reflect no less than the true cost of dispensing prescription medications to Medicaid patients,” the letter stated.

NACDS has emphasized that community pharmacy access is vital because additional services such as vaccinations, screenings, health education and innovative programs help improve patient health and prevent more costly forms of care.

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