The Centers for Medicare and Medicaid Services (CMS) should closely follow congressional guidance included in the health care reform law as the agency implements a new formula for Medicaid generic drug reimbursement based on average manufacturer price (AMP), according to the National Community Pharmacists Association.


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NCPA to CMS: Follow health reform law with new AMP formula

October 6th, 2010

ALEXANDRIA, Va. – The Centers for Medicare and Medicaid Services (CMS) should closely follow congressional guidance included in the health care reform law as the agency implements a new formula for Medicaid generic drug reimbursement based on average manufacturer price (AMP), according to the National Community Pharmacists Association.

"Pharmacies will become an even more important source of health care-related services for Medicaid beneficiaries as new health care reform provisions are implemented," NCPA acting executive vice president and chief executive officer Douglas Hoey said in a statement Wednesday. "We look forward to working with CMS to implement these important provisions in a manner that maintains access to prescription drugs and services for Medicaid beneficiaries."

CMS recently withdrew from a previously proposed AMP rule several provisions that would have resulted in devastating cuts in Medicaid pharmacy reimbursement to community pharmacies, NCPA said. The implementation of that rule was halted through an injunction obtained with NCPA's efforts in 2007.

In its recent letter to CMS on the new proposed regulation, NCPA offered the agency recommendations as it works to implement this and other provisions in the Patient Protection and Affordable Care Act (PPACA).

NCPA suggested that CMS implement the new formula via a formal rulemaking process that allows for stakeholder input. It also recommended that the agency give manufacturers more direction in calculating their AMPs, such as by requiring that manufacturers include in the calculation of AMP only those prices that were actually paid by wholesalers for drugs that were subsequently sold to community retail pharmacies.

The association also called on CMS to minimize disruption for patients and pharmacies by setting up a process in which the revised federal upper limits (FULs) resulting from the revised AMP data will be implemented. NCPA also urged the agency to recognize the negative impact that inadequate generic prescription drug reimbursement will have on community pharmacies.

"While the new law restores some of the planned cuts to Medicaid pharmacy reimbursement, NCPA believes that those cuts were so severe that this partial restoration by PPACA could still result in many pharmacy closures and a reduction in patient access to pharmacies, especially in urban and rural areas," NCPA stated.

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