Pharmacy groups send letter to Senate supporting Fair Medicaid Drug Payment Act

WASHINGTON A coalition of organizations, including the National Association of Chain Drug Stores and the National Community Pharmacists Association, sent a letter to all members of the Senate on Friday to urge the passage of the Fair Medicaid Drug Payment Act (S. 1951), sponsored by Finance Committee chairman Max Baucus, D-Mont.

“The Deficit Reduction Act of 2005 and implementing regulations by the Centers for Medicare and Medicaid Services made severe cuts to Medicaid pharmacy reimbursement for generic drugs. These cuts take full effect in January 2008, and will reduce payments to pharmacies by more than $8 billion over the next five years,” the letter said. “In fact, these cuts are so drastic that both the Department of Health and Human Services’ Office of Inspector General and the Government Accountability Office agree they will result in below-cost reimbursement for pharmacies on many commonly dispensed generic drugs.”

Other organizations signing the letter included the Food Marketing Institute, the American Pharmacists Association, the Pharmaceutical Care Management Association, the Healthcare Distribution Management Association, the National Alliance of State Pharmacy Associations, and the Generic Pharmaceutical Association.

Among its provisions, Sen. Baucus’ proposal, the letter states, will best define the reimbursement benchmark of average manufacturer price. Under CMS’ current definition, AMP inappropriately includes discounts and rebates that are not available to retail pharmacies. 

“No health care provider should be expected to participate in a health care program at below cost reimbursement,” the letter stated. “The potentially devastating effects on pharmacy access should be obvious. … This is the only action that will ensure that pharmacies are fairly reimbursed for the services and critical medications they provide and that Medicaid beneficiaries continue to enjoy access to their local pharmacies.”