Pallone Pledges Support on Medicaid, Reform


PALM BEACH, Fla. —As Congress grapples with an economy and a health system in crisis, pharmacy advocates must redouble their efforts to reach federal lawmakers through grassroots lobbying and direct contact with their representatives if they’re to win a seat at the health reform table, an influential member of the House of Representatives told chain pharmacy leaders here.

Addressing the final business session of the National Association of Chain Drug Stores 2009 Annual Meeting on April 21, Rep. Frank Pallone, D-N.J., urged NACDS members to ramp up their campaign for a fair Medicaid payment system and a bigger role as community health providers. Pallone, who chairs the House Energy and Commerce Subcommittee on Health, pledged to work on their behalf.

Pallone is the primary sponsor of the Fair Medicaid Drug Payment Act of 2007, which NACDS president and CEO Steve Anderson said “establishes an accurate benchmark for pharmacy reimbursement for generic drugs in the Medicaid program and ensures continued Medicaid beneficiary access to pharmacy services.”

Pallone’s legislation would eliminate a plan by the Centers for Medicare and Medicaid Services to shift to a new and controversial payment system for reimbursing pharmacies for dispensing generic medications to patients enrolled in Medicaid. That system, based on the average manufacturer’s price of the drug as defined by CMS, would drastically reduce reimbursements to pharmacies and actually discourage the use of lower-cost generics, according to pharmacy advocates.

Addressing NACDS members, Pallone agreed. “We are trying to encourage not only health reform but the use of generics, and the last thing I would like to see is for us to move away from generics—which obviously save the federal government and the system money—back to name-brand drugs, which could result if what you can charge for generics falls too low.” Nevertheless, Pallone cautioned that the lack of understanding among most lawmakers of health and pharmacy issues creates a big obstacle to reform.

For that reason, said Pallone, “I would stress that your role as an organization—doing grassroots, contacting members of Congress, taking them to the local pharmacy and explaining to them what this is about—is very crucial over the next few months.”

Pallone said the Fair Payment bill would soon be reintroduced in the House and Senate. “We’re working with Sen. Baucus, and hopefully within the next few weeks, we will introduce the legislation, and the two bills, mine and Sen. Baucus’ bill, will hopefully be the same,” he said.

The biggest hurdle, other than educating lawmakers, added the congressman, is money. “It can be expensive to correct this, and we need to figure out how to pay for it.”

As things stand now, said Pallone, the retail pharmacy industry is on borrowed time. “The Medicare Improvement Act extended the deadline for the Deficit Reduction Act to go into effect until September of this year, and you have a court challenge still out there. But we want to fix this legislatively.”

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