Drug Topics - December 1, 2008 - (Page 4) Regulatory & Law MEDICARE/MEDICAID Fred Gebhart, Contributing Editor CMS issues final rule on multisource drugs The Centers for Medicare and Medicaid Services (CMS) issued a final rule to define multiple-source drug products under the Medicaid program. The final rule responds to a federal court injunction and congressional action blocking implementation of Average Manufacturer Price (AMP). The final rule confirms CMS’ interim final rule, published in the Federal Register March 14. Critics say the rule will set generic Medicaid drug reimbursements 36 percent below acquisition cost. “If AMP goes into effect the way CMS envisions it, 10,000 to 12,000 community pharmacies will go out of business,” said Charlie Sewell, former senior vice president of government affairs, National Community Pharmacists Association. “That’s why the federal court stepped in.” The interim final rule defines three tests to identify a multiplesource drug for use in applying a federal upper limit (FUL) in Don Bell, NACDS senior vice Medicaid. For a drug product to president of legal affairs and general counsel be rated multisource, there must be at least one other drug product rated its therapeutic equivalent by the U.S. Food and Drug Administration (FDA); it must be determined to be pharmaceutically equivalent and bioequivalent by FDA; and it must be sold or marketed in the state for which a FUL is being set. CMS’ original proposed rule included the first two tests. The third test included the entire United States rather than each individual state. “There are too many regional manufacturers and distributors that do not have drug products available nationally,” said Don Bell, NACDS senior vice president of legal affairs and general counsel. “Just because you can get a product in Alabama doesn’t mean that you can get it in New York or that you can get it at the same price." NACDS and NCPA challenged CMS in federal district court in 2007. The two associations argued that CMS’ definition is inappropriate. The associations also argued that CMS’ definition does not match the statutory definition of multisource drug created by the Social Security Act sections that created the Medicaid program. They charged that CMS failed to follow proper administrative procedures in creating AMP rules and regulations. Their arguments won an injunction stopping implementation of the AMP program in December, 2007. Additional information must be submitted to the court this month. The injunction could be extended or lifted in 2009. “What CMS did here was blink as a result of the lawsuit and the restraining order,” Sewell said. Key points in the suit included CMS’ definition of a multiple-source drug as well as the reference prices and procedures the agency used to set reimbursement levels. In its final rule, the agency changed its definition of multisource drug product to meet some, but not all, of the plaintiffs’ objections. “CMS is slowly moving in the direction of complying with the statute,” Bell said. “But they are not there yet. We still have problems with the new definition.” CMS has a different view. “We published the final rule to conform our regulatory definition of multiple-source drug with the statutory definition found in the Social Security Act,” the agency said in a written statement to Drug Topics. “With this issue resolved, we hope to move forward on the litigation with the U.S. District Court.” CMS has not responded to other objections to AMP, Bell said. He said the agency failed to follow required administrative procedures. More important, CMS includes a wide range of non-retail drug prices in setting retail FULs. “CMS is not following the simple provisions of the statute that define AMP as the average price paid by wholesalers for the retail class of trade,” he said. “CMS is using a broad range of prices paid by physicians, surgical centers, hospital pharmacies, and other buyers outside the retail setting.” Litigation is only one issue. Earlier this year, Congress passed Public Law 110-275 (introduced as HR 6331) over a presidential veto. The law amends titles XVIII and XIX of the Social Security Act to extend several expiring provisions and maintain access to care. Section 203 delays implementation of AMP until Sept. 30, 2009. “Congress recognizes that pharmacy would be put in a pretty bad position by AMP,” Sewell said. “Putting pharmacies out of business would reduce access, which would drive up the costs of care, not save money. Members of Congress and key staffers have recognized the problem. The next Congress is going to have to fix the mess.” W W W.D R U GTO P I C S .C O M 4 DRUG TOPICS D E C . 1, 2008 COURTESY OF NACDS http://WWW.DRUGTOPICS.COM
Table of Contents Feed for the Digital Edition of Drug Topics - December 1, 2008 Drug Topics - December 1, 2008 Federal Rules Squeeze Illicit Online Rx Sales CMS Issues Final Rule on Multisource Drugs Drug Topics - December 1, 2008 Drug Topics - December 1, 2008 - Drug Topics - December 1, 2008 (Page 1) Drug Topics - December 1, 2008 - Drug Topics - December 1, 2008 (Page 2) Drug Topics - December 1, 2008 - Federal Rules Squeeze Illicit Online Rx Sales (Page 3) Drug Topics - December 1, 2008 - CMS Issues Final Rule on Multisource Drugs (Page 4)
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