Court delays action, yet again, on Medicaid AMP payment plan

2/20/2009

ALEXANDRIA, Va. In a decision praised by chain and independent pharmacy groups, a federal judge today moved to postpone a hearing regarding a government plan to implement new payment guidelines for generic drugs dispensed under Medicaid.

U.S. District Judge Royce Lamberth agreed to a joint request from the National Association of Chain Drug Stores, the National Community Pharmacists Association and the U.S. Department of Health & Human Services to delay a hearing on HHS’ plan to shift Medicaid generic drug reimbursements to a new formula, based on the average manufacturer’s price [AMP] of the drug. Behind the delay: the same issue that has hampered previous government efforts to impose the new AMP formula: the dispute over the definition of a “multiple source drug” for purposes of payment to pharmacies.

The hearing was originally set for Feb. 25. Judge Lamberth’s postponement decision is expected to freeze any further action on the case until at least mid-May, according to NACDS.

The request by NACDS, NCPA and HHS to delay the hearing came “in light of the change in administration at HHS,” noted the pharmacy groups in a joint statement. In addition, noted NACDS and NCPA, the Centers for Medicare and Medicaid, a division of HHS, “must resolve any regulatory issues related to yet another revised definition of ‘multiple source drug,’ and is not prepared to proceed with the case at this time.”

This will be CMS’ fourth attempt to define “multiple source drug.” The agency’s last attempt at a definition was rendered invalid after NACDS and NCPA argued in court that CMS failed to take into consideration an NACDS-NCPA economic report that examined the impact of AMP-based Medicaid reimbursements when developing its definition of a multi-source, or generic, medication.

“Unfortunately, the story of CMS’ Medicaid AMP rule can be summarized by the often-used phrase, ‘mistakes were made,’” said NACDS president and CEO Steven Anderson and NCPA CEO and executive VP Bruce Roberts in a joint statement. “We are committed to getting the Medicaid pharmacy reimbursement rule right, for the good of pharmacy, patients and nation’s entire healthcare delivery system.

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