Court agrees to halt January imposition of AMP-based Medicaid payment formula
ALEXANDRIA, Va. In a dramatic turn of events and a major victory for beleaguered retail pharmacy leaders, a federal judge late Friday afternoon ruled in favor of the National Association of Chain Drug Stores and the National Community Pharmacists Association and agreed to halt temporarily the government’s plan to impose Medicaid reimbursement reductions on community pharmacies. Those reductions were set to take effect early next year.
U.S. District Court Judge Royce Lamberth ruled today that the Centers for Medicare & Medicaid Services will not be permitted to post data on the Internet related to the average manufacturer price [AMP] of generic pharmaceuticals. Even more significant in the near term, Judge Lamberth also granted an injunction that will prevent CMS from adopting the reduced AMP-based reimbursement formula for generic prescriptions—set to take effect Jan. 30, 2008—until he’s had an opportunity to fully review the new payment plan.
The court’s decision came in response to a lawsuit and an urgent motion for a preliminary injunction, filed last month by NACDS and NCPA. In a joint statement this afternoon, the leaders of both organizations hailed the ruling.
“We are very pleased that Judge Lamberth’s ruling was not only fair, but positive for the community pharmacy industry,” said NCPA executive vice president and chief executive officer Bruce Roberts, and NACDS president and chief executive officer Steven Anderson. “We cannot emphasize enough how these Medicaid cuts would hurt low-income patients who may have difficulty accessing their prescription medications in the nation’s pharmacies.”
The next step in the legal process is a final ruling by Judge Lamberth on the merits of the lawsuit, according to the two groups. Until that time, the AMP rule put forth by CMS will not take effect.
NACDS and NCPA filed suit against CMS and the U.S. Department of Health and Human Services Nov. 7, and followed up that action with a motion for a preliminary injunction Nov 15. Also named in the suit, in their official capacities, are Health and Human Services secretary Michael Leavitt and CMS acting administrator Kerry Weems.
NCPA and NACDS have pledged to push for a long-term legislative solution to the Medicaid reimbursement crisis—which would drain roughly $8 billion from retail pharmacies over the next few years if imposed under current plans by CMS. “Only new legislation can completely eliminate the severe damage to community pharmacies and ensure that patients continue to have access to their prescription medications,” Roberts and Anderson said.