ALEXANDRIA, Va. The National Association of Chain Drug Stores commended the Centers for Medicare and Medicaid Services on Tuesday after the agency proposed a rule that would withdraw two provisions related to pharmacy Medicaid reimbursement.

In a letter to CMS, NACDS said that it believed the average manufacturer price final rule was "fundamentally flawed, and implemented the Medicaid pharmacy reimbursement provisions of the Deficit Reduction Act of 2005 in a manner that was inconsistent with congressional intent," the letter stated. "Rather than continuing efforts to implement the flawed AMP final rule, we applaud the agency for moving forward with withdrawing the provisions of the AMP final rule, as well as the multiple-source drug rule."

Federal law defines AMP as “with respect to a covered outpatient drug of a manufacturer for a rebate period, the average price paid to the manufacturer for the drug in the United States by wholesalers for drugs distributed to retail community pharmacies and retail community pharmacies that purchase drugs directly from the manufacturer.” The current AMP policy almost could cause retail pharmacies to lose money on nearly every Medicaid generic prescription they dispense.