In the wake of last week's ruling in the First DataBank/Medi-Span case, pharmacy industry groups are turning to Department of Health and Human Services (HHS) secretary Kathleen Sebelius to help head off Medicaid cutbacks that they say threaten patient access to pharmacies. 


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Sebelius urged to intervene in AWP Rx reimbursement issue

September 9th, 2009
Kathleen Sebelius, HHS secretary

ALEXANDRIA, Va. – In the wake of last week's ruling in the First DataBank/Medi-Span case, pharmacy industry groups are turning to Department of Health and Human Services (HHS) secretary Kathleen Sebelius to help head off Medicaid cutbacks that they say threaten patient access to pharmacies. 

The National Association of Chain Drug Stores (NACDS), National Community Pharmacists Association (NCPA) and National Alliance of State Pharmacy Associations (NASPA) said Wednesday that they have hand-delivered a letter to Sebelius' office seeking her intervention in the matter.

A federal appeals court ruling on September 3 upheld the First DataBank/Medi-Span settlements concerning pharmacy reimbursement rates under the average wholesale price (AWP) benchmark for most single-source and multiple-source prescription drugs.

Under the settlements, First DataBank is slated to reduce the AWPs of 1,442 drugs from 125% to 120% of the wholesale acquisition cost on September 26. The companies also plan to reduce the AWPs for another 20,000 prescription products and stop publishing AWPs within two years, the pharmacy groups said in the letter.

"These changes to AWP will reduce Medicaid reimbursement to pharmacies by about 4%, which translates to a conservatively estimated loss of more than $350 million each year in Medicaid payments to community pharmacies," stated the letter, which was signed by chief executive officers Steve Anderson of NACDS, Bruce Roberts of NCPA and Rebecca Snead of NASPA. "These reductions may force many pharmacies to close, reduce hours or stop providing Medicaid pharmacy services."

After last week's ruling, Anderson had noted that the "urgency for action" now rests with the states. And that's where the pharmacy groups are now calling on Sebelius to get involved.

"We strongly urge you to please act now to instruct states to modify their Medicaid pharmacy reimbursement rates such that access to pharmacy services can be maintained," the letter to Sebelius concluded. The letter also has been put to the attention of leaders of the Senate Finance Committee and the House Energy and Commerce Committee.

First DataBank, a subsidiary of Hearst Corp., and Medi-Span, a unit of Wolters Kluwer Health, were defendants in a class action filed in 2007, in which Medi-Span was charged with negligently publishing AWP information wrongfully inflated by First DataBank, a prior Medi-Span owner.

 

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