Senators urge for Medicaid generic drug reimbursement provision in health-reform bill

NEW YORK The mid-December plea by 16 members of Congress to assure a fair payment for pharmacies that dispense generic drugs to Medicaid patients was welcome news. But with the movement to pass a health-reform bill reaching a crescendo in the Senate, the flawed Medicaid pharmacy reimbursement system still is a hot potato that too few lawmakers seem willing or able to touch.

More aptly, it’s a political football that keeps getting tossed around the House and Senate health-reform debate.

Contained in the Senate and House versions of health-reform legislation are two competing visions for how community pharmacies will be paid for dispensing generic medicines to Medicaid patients. The bill passed last month by the House of Representatives contains a proposal for Medicaid to pay pharmacies at 130% of the weighted average of the drug’s acquisition cost as defined by its average manufacturer price, or AMP. The Senate bill — which appears likely to pass on Christmas Eve despite Republican filibustering, with a bare 60-vote Democratic majority — calls for generics dispensed under Medicaid to be reimbursed at 175% of the weighted average.

Neither plan pays enough. Even a 175% multiplier for dispensing generics under Medicaid won’t guarantee that pharmacies will break even every time their professionals perform the service, let alone make a small profit, given all the labor and administrative costs involved in pharmacy dispensing. And if lawmakers reconcile both versions of health-reform legislation by splitting the difference between the House and Senate payment plans, many retail pharmacies are almost certain to lose money to the pending Medicaid payment system. And as things now stand, it’s only a temporary federal court injunction that’s keeping that system from taking effect.

For a retail business, asking Congress to assure that you won’t lose money every time you provide a vital health service to Medicaid beneficiaries doesn’t seem a lot to ask. But some lawmakers apparently think it is. Either because they’re distracted by the massive scale of the health-reform proposals, or because they’re unwilling to consider the impact the Medicaid reimbursement plan will have on community pharmacies nationwide, too few members of Congress have risen to the defense of the nation’s most accessible and cost-effective healthcare providers.

What makes the whole impasse even more mystifying is the fact that lawmakers who vote against a fair Medicaid reimbursement for generic drugs are voting against saving U.S. taxpayers billions of dollars in federal health costs. Generics could be a vital tool in the government’s effort to bend the healthcare-cost curve, and giving pharmacies a decent incentive to dispense them, instead of penalizing them for switching patients from higher-ticket branded drugs to me-too meds, should be a no-brainer.

That begs the question of why only 16 representatives appealing to House Speaker Pelosi for a higher federal upper limit for Medicaid generics?