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Baucus bill a mixed bag for pharmacy


NEW YORK Question: What piece of compromise legislation proposes to overhaul the U.S. healthcare system at a price tag of $856 billion and promises to address both the unsustainable costs of that system and the crisis of uninsured and under-insured Americans – while failing to fully satisfy almost everyone involved in the health reform debate?


The answer: The Baucus bill, hammered out over the summer by six members of the Senate Finance Committee under urgent pressure from committee chairman Max Baucus, D-Mont., and presented to the nation last week as the “America’s Healthy Future Act. Health policy expert Adam Fein of Pembroke Consulting calls it “223 pages of wonky goodness.”


Did we mention that the blandly-named proposal also makes pharmacy retailers nervous?

The Baucus bill is an ungainly but plucky attempt to pull together America’s patchwork of bitterly divided factions amid the ongoing rancor over the future of the U.S. healthcare system and the role government will play in that system. It’s an attempt to bridge the growing divide between those who fear any attempt at reforming the current, unsustainable system as a slide into socialism and unbridled government power – and those who view the prospect of doing nothing to reform that system as akin to heading over a cliff. But it leaves virtually no one – including pharmacy advocates – fully satisfied.

Then again, what piece of health reform legislation could? Given the intense polarization we’ve seen this year among Americans – town hall meetings where shouting and anger replace dialogue, charges and countercharges, a member of Congress accusing the president of outright lying during a major healthcare address to both chambers – it’s clear that the debate over how to fix the healthcare system goes to something deep in the nation’s psyche. The disagreement over healthcare reform and extending health benefits to all Americans is a battle over the proper role of government and what constitutes a basic right vs. a privilege.

For community pharmacy, the stakes in the health overhaul debate are more concrete. On the “half a loaf” principle, the leaders of the National Association of Chain Drug Stores and its independent drug store counterpart, the National Community Pharmacists Association, have expressed at least lukewarm support for the Baucus bill’s proposal for a new prescription reimbursement model for Medicaid, particularly for its use of a “weighted average” for the average manufacturer price of a generic drug to establish its cost as a basis for pharmacy reimbursements. That weighted average AMP is a far more accurate reflection of the drug’s acquisition cost to pharmacies, both groups argue.

Baucus’ proposal also sets a somewhat more generous “multiplier” for establishing Medicaid drug reimbursement benchmarks – at 175% of the weighted average of AMP. Although that’s still far less than the 300% multiplier envisioned in earlier Medicaid overhaul proposals from pharmacy-friendly legislators like Arkansas Democrat Marion Berry, it’s enough, when combined with the shift to a weighted average, to merit further study, NACDS and NCPA indicated.

Concerns remain, though. Both NACDS and the Generic Pharmaceutical Association have expressed concern that the 175% reimbursement benchmark would undercut pharmacists’ incentive to dispense lower-cost generics, thus adding more costs to the health system and penalizing generic makers.

Nevertheless, pharmacy advocates are pleased with some other aspects of the bill, including a provision that exempts small-scale pharmacies from having to gain accreditation to continue selling durable medical equipment and basic health supplies like diabetic care products. They also like Baucus’ proposal to provide relief for seniors when they hit the Medicare Part D drug coverage gap.

Other fine details remain murky. Among them: the role of community pharmacy in providing medication therapy management, and how that service would be reimbursed.

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