Lupin 2023

Final AMP rule marks big victory for Rx

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ALEXANDRIA, Va. — Community pharmacy groups won a major victory earlier this month in their continuing battle to stem reductions in pharmacy reimbursement.

The Centers for Medicare & Medicaid Services (CMS) has issued a final rule that withdraws provisions of the Medicaid pharmacy reimbursement formula under the average manufacturer price (AMP) model.

The National Association of Chain Drug Stores and the National Community Pharmacists Association (NCPA) hailed the rule change, which they said removes provisions that define AMP as well as determine the calculation of federal upper limits (FULs) and define a “multiple-source drug.”

The provisions relate to the reimbursement to pharmacies for generic drugs under Medicaid and, in turn, affect patient access to pharmacies, the associations noted.

With the action, CMS pulled provisions of a July 2007 rule that has been blocked by an injunction following a lawsuit brought by NACDS and NCPA.

The agency had proposed the rule change in September, and the proposal was praised by NACDS last month.

“The Centers for Medicare & Medicaid Services move to withdraw provisions of the Medicaid pharmacy reimbursement formula under the average manufacturer model is a victory for patients and pharmacy,” NACDS president and chief executive officer Steve Anderson and NCPA executive vice president and chief executive officer Kathleen Jaeger said in a joint statement.

NACDS and NCPA challenged the original final rule in federal court in the District of Columbia in 2007 and won an injunction that prohibited the implementation of the AMP rule.

The injunction has subsequently prevented an estimated $5.5 billion in Medicaid reimbursement cuts to pharmacies nationwide.

“When we filed the lawsuit in 2007 we knew that patient care was at stake. It is important to point out that the withdrawal of these provisions is another step toward reducing what would have been major cuts to pharmacy reimbursement,” Anderson and Jaeger stated. “The end result is not an increase in reimbursement to pharmacy, but rather the lessening of cuts that previously would have involved pharmacies selling most generic drugs at a loss, thereby threatening their long-term ability to provide patient care and access.”

The executives added that NACDS and NCPA “insisted that this policy was not appropriate” and have called on policy makers to recognize the vital role that community pharmacies and pharmacists play in helping to improve health care outcomes and, consequently, reduce medical costs.

“We are gratified that this sense is reflected in the pharmacy provisions of the new health care reform law,” Anderson and Jaeger commented.

“The new law contains provisions ranging from dramatically reducing the AMP cuts to advancing medication therapy management, through which pharmacists can help patients take their medications correctly, which is referred to as ‘medication adherence.’ The costs related to poor medication adherence have been estimated to reach $290 billion annually, or 13% of all health care expenditures,” the executives stated.

“We urged that patient care should not be jeopardized, but rather that pharmacy be engaged more strategically for the good of patient health and health care delivery.”

NACDS and NCPA added that they will continue to work with CMS and Congress to advocate for patient access to pharmacy services. Earlier this month NACDS sent briefing letters to the new members of Congress to educate them about the pivotal role of pharmacy in the nation’s health care system.


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