The National Association of Chain Drug Stores has responded swiftly to draft health care legislation unveiled by House Democrats in late June with testimony before a key House committee followed by a letter to the chairmen of three committees involved in drafting the law.


National Association of Chain Drug Stores, NACDS, RxImpact Day, Health Reform Discussion Draft, Medicaid, Medicare Part D, Paul Kelly, House Energy and Commerce Subcommittee on Health, medication therapy management, average manufacturer price, Steven Anderson, Charles Rangel, Henry Waxman, George Miller, AMP, MTM,




































































































































































































































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NACDS is heard in legislative fray

July 20th, 2009

WASHINGTON – The National Association of Chain Drug Stores has responded swiftly to draft health care legislation unveiled by House Democrats in late June with testimony before a key House committee followed by a letter to the chairmen of three committees involved in drafting the law.

The latest NACDS efforts built on the groundwork laid by more than 180 meetings with members of Congress by pharmacy advocates as part of NACDS’ RxImpact Day on Capitol Hill on June 17.

Just two days after those meetings, the House committees on Ways and Means, Energy and Commerce, and Education jointly issued the Health Reform Discussion Draft, an 850-page document drafted without participation by House Republicans.

Some of the major provisions of the draft include the creation of a health insurance exchange, a public health insurance option, guaranteed coverage and tighter regulation of insurance companies, expansion of the Medicaid program through federal funding, and elimination of the “doughnut hole” in the Medicare Part D drug program.

On June 24 NACDS vice president of federal government affairs Paul Kelly testified before the House Energy and Commerce Subcommittee on Health as part of the committee’s review of the draft legislation.

Kelly underlined the vital role of community pharmacy in providing access to quality health care and preventive services such as immunization.

He also emphasized the positive contribution such pharmacy services as medication therapy management (MTM) can play in reducing health care costs and improving patient outcomes.

“When patients take their medication as prescribed, it is possible to reduce utilization of costly medical services such as emergency department visits and unnecessary physician visits,” he said. “Failure to take medications as prescribed has been estimated to impose $177 billion in direct and indirect health care costs.”

Kelly went on to detail specific measures that NACDS and other community pharmacy organizations have advocated, beginning with reform of the mechanism used to determine pharmacy reimbursement for generic drugs under Medicaid.

He reminded committee members that the Deficit Reduction Act of 2005 required the use of average manufacturer price (AMP) to determine manufacturer rebates and not to serve as the benchmark for pharmacy reimbursement.

Kelly also delved into the details of AMP-based reimbursement, arguing that the 30% markup being proposed may not be adequate given the low cost of generic drugs.

In addition, he deplored the recent rejection of a modest increase to pharmacy dispensing fees in the state of Washington by the Centers for Medicare and Medicaid Services (CMS).

The current average dispensing fee under Medicaid is $4.40, he noted, whereas a study by the accounting firm Grant Thornton has concluded that the actual cost to dispense a drug averages about $10.50.

Following up on Kelly’s testimony, NACDS president and chief executive officer Steven Anderson wrote a letter to Reps. Charles Rangel of New York and Henry Waxman and George Miller of California, the Democratic congressmen who respectively chair the House Ways and Means, Energy and Commerce, and Education committees.

The letter reemphasized the chain drug industry’s messages on AMP reform and MTM services but also went on to urge the committees to address additional issues that emerged in the discussion draft.

For example, Anderson urged that MTM services provided by pharmacists be included in a medical home pilot project. He also cautioned that giving the secretary of health and human services the right to negotiate pharmacy reimbursement rates under the public plan in order to contain costs could result in inadequate reimbursement that would discourage participation by pharmacies and reduce patient access.

Both Anderson and Kelly called on Congress to exempt state-licensed pharmacies from the CMS requirement that suppliers of durable medical equipment, prosthetics, orthotics and supplies (including diabetes supplies) post a surety bond of $50,000 per location and obtain accreditation to serve Medicare beneficiaries.

In his letter, Anderson pointed out that by CMS’ own estimate, more than 25,000 suppliers will exit the Medicare program as a result of the requirements, leaving patients without a source not only for their durable equipment and supplies but also for their Part B drugs and pharmacist counseling.

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