Drug Topics - February 11, 2008 - (Page 30) 30 DRUG TOPICS FEBRUARY 11, 2008 www.drugtopics.com Cover Story BRACING FOR A SHOWDOWN Pharmacists have temporarily blocked the Medicaid AMP formula, but a bruising battle still awaits Reid Paul verage manufac- of Dispensing, a national study conducted by accounting turer price is firm Grant Thornton that was commissioned by the dead, or is it? Two Coalition for Community Pharmacy Action, the namonths after a Federal tional average cost of dispensing medications is $10.50 District Court Judge per prescription, even though the average dispensing fee granted a temporary re- paid by government programs such as Medicaid is closstraining order, pre- er to $4.50. (See sidebar on page 34). venting the Centers for The prospects for average wholesale price (AWP) Medicare and Medicaid seem equally unclear. For years AWP—the most pervaServices from imple- sive measure currently used for pharmacy reimbursementing the new gener- ment—has been under attack from critics who argue ic drug reimbursement that it is subject to manipulation and lacks transparenmodel for Medicaid, cy. Many pharmacists countered that argument by inthe future of the reim- sisting that PBMs have already squeezed AWP reimbursement plan re- bursements and that any further reductions in mains up in the air. reimbursement would drive pharmacies out of business. Still, while it is unclear In 2005, Congress mandated Medicaid change how or when the case from AWP to AMP in an effort to reduce the budget will be resolved, most deficit and rein in spending in the healthcare propharmacy experts agree gram. In addition, a group representing unions sued that pharmacists will continue to see tightening in First DataBank, one of the primary publishers of prescription drug reimbursement. AWP, and the wholesaler McKesson, claiming they The average manufacturer price (AMP) rule, in fact, willfully manipulated AWP to inflate pharmacy reimis just the latest battleground for pharmacists as CMS, bursement. First DataBank had agreed to settle the pharmacy benefit managers, and prescription drug plans case and stop publishing AWP data, but in a surprise all push to reduce prescription drug costs. “The critical move Judge Patti Saris has invalidated the settlement. issue was years ago when pharmacists According to sources DT CAPSULE gave up being price setters and became who attended the hearprice takers,” insists David Kreling, ing, the judge indicated Ph.D., of the School of Pharmacy at that she was unwilling to Government programs University of Wisconsin – Madison. allow the elimination of are becoming the largest AWP through the settle“The legacy going back to the 1960s is that drug reimbursement has been ment. (See “AMP is back source of pharmacy fraught with inaccuracies from day from the dead,” page 8). one. Drug payment is not just the drug Opponents remain unreimbursement costs, but also includes dispensing fees; deterred. “The marketboth of those were in error from the start.” place is waking up to how rotten AWP is,” argued Alex Unfortunately for many pharmacists, while drug re- Sugarman-Brozan, director of the Prescription Access imbursement formulas are becoming more accurate, Litigation (PAL) Project, which brought the suit. dispensing fees are not. Even as payors push for greater Whatever the prospects for AWP, a showdown is accuracy in drug cost models, there has been no compa- looming over the future of pharmacy reimbursement. rable change in drug dispensing. According to The Cost As government healthcare programs increasingly dom- A Illustration: Craig Howell http://www.drugtopics.com
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