Drug Topics - December 10, 2007 - (Page 30)

30 DRUG TOPICS DECEMBER 10, 2007 www.drugtopics.com Government and Law An interview with Larry Kocot: Lessons from CMS Sandra Levy I Larry Kocot thinks AMP won’t have as dire an impact on pharmacy as it fears. n July, Larry Kocot, former senior advisor to the administrator at Centers for Medicare & Medicaid Services, joined the Brookings Institution’s economic studies program as a visiting fellow and deputy director of the Engelberg Center for Health Care Reform. Then last month Kocot assumed the senior counsel position at Sonnenschein Nath & Rosenthal LLP’s national Health Care Group. Drug Topics interviewed Kocot, who was once the general counsel to the National Association of Chain Drug Stores, to find out what lessons from CMS he can impart to pharmacy. it’s nothing short of remarkable what was pulled off. Polls indicate that as high as 90% of the people are satisfied with the program and really like what they have. How have pharmacies been impacted by Medicare Part D? Pharmacists complain that payments are slower than Medicaid. The payments are lower than they were in cash. Pharmacies will have to adjust to the realities of a third-party world, and that is a challenge. However, the challenges are far outweighed by the opportunities for pharmacy. What are your goals at the Brookings Institution? What opportunities do you see for pharmacists with Part D? There are tremendous opportunities for them to leverage their position in the Medicare program. Already you have pharmacies that have recognized the plans that focus on them as a provider. The MemberHealth program is clear evidence of that. It is very pharmacy centric and has proven to be a very successful program because of what pharmacy has brought to it. There’s a lot pharmacists can do with Medicare as kind of a laboratory and a standard for the rest of third party. My position at Brookings keeps me current in policy issues and allows me to continue driving policy. The director of the Engelberg Center is Mark McClellan. This was an exciting opportunity to continue in the drive toward meaningful healthcare reform, and that is really what we (CMS) started with Part D. Currently, CMS is spending $1.6 billion a day, 365 days a year, on health care. It’s surpassed the DOD [Department of Defense] and will soon pass Social Security as the largest federal government agency in terms of outlays. It is just not sustainable. What are your thoughts about the Medicaid AMP issue? AMP [average manufacturer price] was designed for a specific purpose. It wasn’t for pharmacy reimbursement but for manufacturer rebate purposes. Transferring that concept to pharmacy reimbursement is a very challenging thing to do. I think the agency has done a very good job bringing to AMP a workability that hasn’t been given credit, and I don’t think it will until the numbers become clear. What people have focused on is the $8.5 billion of savings that supposedly will come from pharmacy on generic drugs. I don’t think the hit will be that much. I have a pretty good indication of what the numbers will look like and I don’t think they will be anywhere near where the pharmacy community has made [them] out to be. Will there be cuts? Sure, the whole purpose of this exercise was to bring generic reimbursement in line with what it should be. We have to get a payment system for pharmacists that is not only rational and fair, but pays them adequately for their acquisition cost on the drug and compensates them for their overhead and services and provides a profit. Everyone is entitled to a profit. DT What areas are you focusing on to bring greater quality and value to the healthcare system? We received a grant from the Robert Wood Johnson Foundation to move the needle on quality. As part of that, we are staffing the Quality Alliance Steering committee which is chaired by Mark [McClellan] and Carolyn Clancy at the Agency for Healthcare Research & Quality (AHRQ). A big part of that effort is taking data from many plans—covering millions of lives—and possibly aggregating them with government data so you have data across all populations and can develop meaningful measures to start pushing toward a greater value in terms of health care. How would you describe Medicare Part D’s impact on pharmacy? Medicare Part D was the largest expansion of the Medicare program [to date]. For me, it was an achievement to get such a large program up and running in such a short time. There were some bumps in the road in the beginning, but http://www.drugtopics.com

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Drug Topics - December 10, 2007 Latebreakers Latebreakers in Depth Letters Health-System Edition - Cover Story Clinical Practice Professional Practice Special Report Technology Community Practice Unraveling Medicare 150 Years of American Pharmacy Rx Care In the Pipeline Cover Story: Fair or foul? Self-Care Chains and Business Government and Law Continuing Education: Natural Medicines for Bone Health New Products Advertisers Index Classified Viewpoint

Drug Topics - December 10, 2007

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