South Carolina has signed into law a budget bill with a provision that fortifies pharmacy reimbursement for Medicaid prescriptions, which the National Association of Chain Drug Stores hailed as a "major victory" for pharmacies and their patients.


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'Major victory' for pharmacy in South Carolina

June 11th, 2010
NACDS chief executive Steve Anderson

ALEXANDRIA, Va. – South Carolina has signed into law a budget bill with a provision that fortifies pharmacy reimbursement for Medicaid prescriptions, which the National Association of Chain Drug Stores hailed as a "major victory" for pharmacies and their patients.

NACDS said Thursday that the provision in the state's new budget will hold pharmacies harmless from the recent First DataBank/Medi-Span average wholesale price (AWP) settlements and, pending approval from the Centers for Medicare and Medicaid Services, will set pharmacy reimbursement at wholesale acquisition cost plus 12.5%.

The law also calls for an adjustment to the Medicaid dispensing fee if the federal average manufacturer's price (AMP) provision "becomes problematic for pharmacies in South Carolina," according to NACDS.

"This truly is a monumental achievement for pharmacy and patients in South Carolina. The pharmacy provisions in the law put patients first by preserving their access to pharmacy care," NACDS president and chief executive officer Steve Anderson said in a statement.

"The excessive rate cuts originally imposed placed a significant burden on pharmacies. The increased reimbursement rate will help preserve access to community pharmacies and maintain the vital pharmacist-patient relationship," he explained. "This helps to foster medication adherence, which refers to patients' taking their medications correctly, and that maintains health and ultimately prevents the need for higher-cost forms of health care."

Anderson added, "Without the advocacy of the South Carolina Association of Chain Drug Stores and the South Carolina Pharmacy Association, patients would not have achieved this victory. We also recognize the efforts of the state legislators and thank them for their swift action in protecting pharmacies and their patients."

As a result of the settlements, which were approved by a federal court early last year, First DataBank and Medi-Span reduced the AWPs of drugs to 120% of the wholesale acquisition cost starting in Sept. 26, 2009, and ceased publishing AWPs, which are used as a drug pricing benchmark. NACDS and other retail pharmacy groups had challenged the ruling before the change went into effect, but it was upheld by a federal appeals court.

First DataBank, a subsidiary of Hearst Corp., and Medi-Span, a unit of Wolters Kluwer Health, were defendants in a class action filed in 2007, in which Medi-Span was charged with negligently publishing AWP information wrongfully inflated by First DataBank, a previous Medi-Span owner.

Earlier this week, NACDS and the National Community Pharmacists Association applauded a decision by the Mississippi Division of Medicaid to forgo proposed reimbursements cuts for pharmacy and other health care providers.

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