Drug Topics - February 11, 2008 - (Page 36) 36 DRUG TOPICS FEBRUARY 11, 2008 www.drugtopics.com Cover Story Once the final rule was promulgated, however, all was not lost for the rule’s opponents. In fact, practically from the moment DRA passed, officials at NCPA, NACDS, the American Pharmacists Association, and the Association of Community Pharmacists Congressional Network (ACP*CN) pressed Congress to “fix” the Judging the future of AWP rule. It did not hurt that other lobbying groups like PCMA did not like the rule either. MP is not the only reimbursement model under attack, but The regulation became effective in September reports of the death of average wholesale price (AWP) ap2007 and drug companies were required to report pear to have been premature. The Prescription Access Litigation AMPs beginning October 30. By December 30, (PAL) Project is suing First DataBank, McKesson, and MediSpan, alleging that the companies conspired to raise the WAC 2007, FULs based on September AMPs would (wholesale acquisition cost)-to-AWP spread to 25% for more take effect. Payments based on those FULs would than 400 brand-name drugs. According to the complaint, those begin as early as January 2008. drugs previously had only a 20% WAC-to-AWP spread. In 2006 At least on the surface Congress appeared ready PAL reached a settlement with First DataBank and Medi-Span to help out. A number of bills appeared with porequiring the companies to adjust reporting of Blue Book AWP tential short-term and long-term fixes with supby reducing the markup factor to 20% and to discontinue pubport from pharmacy organizations. (For more on lishing AWP data altogether within two years. While the case the bill, see sidebar on page 32.) The Saving Our continues—McKesson is not party to the settlement—many exCommunity Pharmacy Act, proposed by Conperts saw the settlement as the end of AWP. However, in Janugresswoman Nancy Boyda (D, Kan.) proposed reary, Judge Patti Saris refused to accept the settlement after placing AMP with a new measure: retail acquisihearing claims from NCPA that the settlement would be devastating to independent pharmacies and could drive many out of tion cost (RAC). The new measure would business. The judge issued no formal statement by press time reimburse pharmacists at 150% of RAC, ensuring and it is unclear what impact, if any, the case will have on the a good profit. The Fair Medicaid Drug Payment current use of AWP reimbursement models. Act of 2007 was introduced in both the House and Senate and offered more modest fixes to AMP. More significantly, in March 2007 a bi-partisan group of 46 senators signaled their opposition to the Making the case against AMP rule. In a letter, the senators charged that “the pro- The fight against AMP tied in closely with NCPA’s focus posed rule creates economic hardships for retail on increasing its political influence. At the 2007 NCPA pharmacies and threatens access to prescription annual conference, Bruce Roberts, CEO and executive drugs by including in the AMP sales to non-retail VP of NCPA, boasted that the NCPA PAC was on target pharmacies, such as mail-order sales and pharmacy to collect more than $1 million for the 2008 elections, a benefit manager rebates Inclusion of these sales fivefold increase over the 2004 election year. and discounts in the calculation of AMP will only In addition, NCPA worked with members of Conserve to reduce pharmacy reimbursement to rates be- gress to form the Congressional Community Pharmacy low the acquisition costs.” Caucus. The group has more than 50 members that If pharmacists were hoping that their concerns support various measures to protect community pharwould be addressed in the final rule CMS issued in macies. “The goal of this caucus is to advocate for issues July 2007, they were cruelly disappointed. CMS re- that face community pharmacists and to make sure they moved nursing homes from its definition of retail can be successful addressing AMP legislation,” expharmacy but added home infusion and specialty plained Cathy McMorris Rodgers (R, Wash.), one of the pharmacies. The final rule also left it unclear whether caucus’ founding members. PBM rebates would be included in AMP data. Even With time running out, pharmacy officials threatthough the final version excludes some PBM rebates, ened legal action. According to Rector, however, it does allow rebates, discounts, and other price con- NACDS and NCPA only moved forward with their cessions that are “associated with” sales of drugs to re- back-up plan when it appeared that legislation would tail pharmacies. The vagueness of the provision pro- not pass and CMS was preparing to post AMP data on vides a loophole for manufacturers to include PBM its Web site. In November 2007, the two pharmacy rebate data. The final “might be worse than the pro- groups filed a lawsuit in federal court alleging that the posed rule,” concluded John Rector, NCPA senior VP AMP rule “unlawfully changes the methodology by and general counsel. which pharmacies are reimbursed” and “is contrary to logistically difficult, but could have had the unintended consequence of negatively impacting manufacturer drug discounting behavior and causing drug prices to increase for the entire pharmaceutical marketplace.” PCMA also argued against the inclusion of mail-order pharmacies. A http://www.drugtopics.com
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