Drug Topics - February 11, 2008 - (Page 32) 32 DRUG TOPICS FEBRUARY 11, 2008 www.drugtopics.com Cover Story inate pharmacy reimbursement, closer, and only a tie-breaking DT CAPSULE pharmacists see the fight over vote by VP Dick Cheney alMedicaid’s AMP rule as essenlowed the bill to pass. A signifitial for shaping the future of re- GAO estimated switching cant portion of the cuts came imbursement. More experts inout of the Medicare and Medicsisted that AMP, in whatever to AMP would reduce aid programs. In signing the bill, form it eventually takes, will President Bush took direct aim Medicaid pharmacy likely become the new reimat pharmacists insisting that bursement model for Medicare reimbursement by 36% “taxpayers should not have to and private insurers. pay inflated markups for the In taking on AMP, pharmacy organizations have been medicine that the people on Medicaid depend.” pulling out all the stops: employing public relations, One of the many DRA provisions instructed Medicaid lobbying, and filing a legal suit to ensure they have a to change its pharmacy reimbursement formula for multiplace at the table. “Historically pharmacists have gone source drugs from its current use of AWP to AMP Under . after Medicaid because they have more influence in pol- Medicaid rules, reimbursement is determined by setting itics,” argued Kreling. The only question is whether that federal upper limits (FULs) on payments to the states. will be enough. FULs are the maximum amount CMS will pay to the states for a specific medication. Ultimately it is the states The rise of AMP that determine the final payout to pharmacists for their In 2005 President Bush signed the Deficit Reduction drug acquisition costs and they may add a dispensing fee Act (DRA) of 2005, a sweeping law that cut nearly $40 or other supplemental payments for services. According to billion in federal spending over a five-year period. DRA the law, the new calculation would be based on 250% of was highly controversial, passing in the House of Repre- the AMP and was slated to start in January 2007. Original sentatives by a mere two votes. In the Senate it was even projections estimated that the change would save $6.3 billion in federal and state pharmacy reimbursements. Even before the AMP specifics were revealed, pharPharmacists go to Washington macists were worried (See, “Perfect Storm,” Drug Topics, ven while pursuing a legal remedy, pharmacy orJune 19, 2006). “We are in the fight of our lives,” Tony ganizations have insisted that the only true “fix” to Civello, then the chairman of the National Association the average manufacturer price rule must be done by of Chain Drug Stores, told the attendees at the group’s Congress. Up until the final days of the last legislative 2006 annual convention. session, pharmacy lobbyists were hopeful that at A December 2006 study conducted by the Governleast one of the bills might be included in a large ment Accountability Office offered one of the few inpiece of legislation, but in the end they were disappointed. No new bills have been introduced. Here are dications of the potential impact of the changeover to brief descriptions of the bills: AMP. GAO researchers looked at a list of 77 of the Saving Our Community Pharmacies Act of 2007 most commonly prescribed and most expensive gener(H. 3140) replaces AMP with a new measure—retail ic medications in the Medicaid program, concluding acquisition cost (RAC)—based on the actual cost to that the reimbursement rate for pharmacists would be pharmacies to purchase generic medications. Pharon average 36% below the cost of drug acquisition. macies would be reimbursed at 150% of the median GAO received previously unavailable AMP data from RAC. The measure would also exclude mail order CMS to reach its conclusions. While CMS sharply disfrom its retail price calculations. The bill, which was inputed the findings, the study gave increased ammunitroduced on July 24, had 130 co-sponsors. tion to critics. The study only examined the DRA and Fair Medicaid Drug Payment Act of 2007 (S. did not include the forthcoming rule that was released 1951 and H. 3700) offers fixes to the AMP without completely replacing it. Under the law Medicaid would later that month. use a weighted average price (rather than lowest) available to retail pharmacy. The bill also excludes CMS proposes an AMP solution mail-order pharmacies and other discounts and reOne of the problems CMS faced was that AMP was debates from the calculation and only considers genersigned to determine rebates and was never meant to be ics with three or more therapeutic equivalents, not just a mechanism for pharmacy reimbursement. Drug comtwo. The bill also proposes raising the reimbursement panies used the measure to determine their rebate liabilto 300% of AMP from 250%. The House bill had 36 ity—a higher AMP meant the drug companies would co-sponsors and the Senate bill had 41 co-sponsors. be responsible for providing larger rebates. For the drug E http://www.drugtopics.com
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.