Coalition of pharmacy, health groups appeals to Congress for Medicaid relief

WASHINGTON Faced with a continuing threat of reimbursement cuts from the federal agency that sets Medicaid pharmacy payments, a broad coalition of pharmacy and other health industry groups again is appealing to Congress for relief.

Seven organizations — including the National Association of Chain Drug Stores, the National Community Pharmacists Association, the American Pharmacists Association and the Food Marketing Institute — co-signed a letter Sept. 19 to leaders in the House and Senate. Their aim: to delay pending Medicaid cuts and to enact a more equitable formula to reimburse pharmacies for dispensing generic drugs to Medicaid beneficiaries.

Lending urgency to the appeal: the fast-approaching expiration of a temporary congressional moratorium on a plan by the Centers for Medicare and Medicaid Services to launch the new Medicaid payment plan.

CMS’ new payment model, based on the average manufacturer price of generic drugs, or AMP, will force pharmacies to dispense multiple-source drugs to Medicaid patients at a loss, the groups charged. “As you know, the AMP reimbursement system for generic drugs in Medicaid was created under the Deficit Reduction Act of 2005,” the letter reminded congressional leaders. “If fully implemented, this law will result in unsustainable cuts to pharmacy reimbursement, distortions in the prescription drug marketplace and, most importantly, could very well curtail patient access to pharmacies and cost effective drugs.”

The coalition reminded congressional leaders — who included Senate majority leader Harry Reid and minority leader Mitch McConnell, as well as House speaker Nancy Pelosi and minority leader John Boehner — that health-reform proposals already under consideration in the House and Senate include “provisions to address AMP.” However, noted the letter, “additional changes are needed to ensure that [AMP] more accurately reflects pharmacy acquisition costs.”

In addition, the groups told lawmakers, “it is extremely important to ensure that the appropriate ‘multiplier’ is used to set the Federal Upper Limits for generic-drug reimbursement.”

Different health-reform bills in the House and Senate have proposed setting Medicaid generic-drug reimbursements at 130% to 175% of the weighted average of AMP. NACDS, NCPA and the other groups appealing to Congress indicated that neither level would be enough to assure pharmacy even a break-even point in the dispensing of generics under Medicaid.

“While the Senate multiplier of 175% is preferable to the House multiplier of 130%, the coalition is reserving judgment on a specific multiplier until additional analysis makes clear that whatever multiplier is used, it assures a reimbursement level that promotes the dispensing of generics and is adequate for pharmacies to care for Medicaid patients,” noted the letter. In addition, the groups wrote, a multiplier of 300% was proposed in the Fair Medicaid Drug Payment Act during the 110th Congress, although the bill failed to gain passage.

Even after that moratorium expires Sept. 30, however, the change to a new pharmacy payment system remains on hold, thanks to an injunction issued by a federal court. Pharmacy advocates won that temporary freeze under a court order that halted implementation of AMP while CMS develops an acceptable definition of a multi-source drug on which to base the AMP payment formula.

“No matter what happens, the injunction will still be in place after Sept. 30,” explained NACDS spokeswoman Chrissy Kopple. However, she added, “The only way this is ever going to be remedied is if CMS redefines the rule, or Congress enacts new legislation.”

What’s more, Kopple said, “The court could still lift the injunction at any time,” although such a scenario isn’t likely, she added, given the uncertainly that remains over multi-source drugs.