The Centers for Medicare & Medicaid Services (CMS) should stop publishing draft federal upper limit (FUL) lists based on average manufacturer price (AMP) until the formal rulemaking process on AMP is finished, the National Association of Chain Drug Stores urged. 


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NACDS to CMS: Quit publishing draft FUL lists

February 10th, 2012

ALEXANDRIA, Va. – The Centers for Medicare & Medicaid Services (CMS) should stop publishing draft federal upper limit (FUL) lists based on average manufacturer price (AMP) until the formal rulemaking process on AMP is finished, the National Association of Chain Drug Stores urged. 

NACDS said it sent a letter to CMS on Friday that called on the agency to cease publication of the lists. To date, CMS has issued four draft FUL lists.

"In addition to the significant reductions in pharmacy reimbursement that would result from implementation of FULs based on AMP, we continue to see great variability in FULs from month to month, the tendency of FULs to appear and disappear from draft FUL lists, the lack of correlation between AMP and pharmacy acquisition cost, and the prevalence of FULs that have been calculated in a manner that is inconsistent with the requirements of the Patient Protection and Affordable Care Act (ACA)," NACDS stated in the letter.

Last month, NACDS and the National Community Pharmacists Association commended a group of senators for questioning draft FUL lists for Medicaid generic drug reimbursement recently published by CMS.

NACDS noted that it has long expressed concerns about using AMP for pharmacy reimbursement, explaining that it's not a price paid in the marketplace but a benchmark for determining manufacturer rebates in Medicaid. NACDS and NCPA won a preliminary injunction in federal court in 2007 to block CMS approach to pharmacy reimbursement with the AMP model, and CMS eventually withdrew all of the contested rules.

In the Feb. 10 letter, NACDS stressed that because the AMP rulemaking process is ongoing, as shown by the proposed rule issued by CMS earlier this month, FUL lists shouldn't be published yet. The association is currently reviewing the proposed rule with its members.

"Based on our initial review [of the proposed rule], it seems unquestionable that there is no uniformity in the way manufacturers currently are calculating and reporting AMPs. As a result, NACDS believes that the draft FULs, calculated without regulatory guidance and seemingly inaccurate, should neither be made available for nor used as a basis for pharmacy reimbursement," NACDS said in the letter. "Furthermore, no further draft FUL lists should be published before a final AMP rule is effective. At the completion of rulemaking, CMS should again issue a draft FUL list, subject to the final AMP rule, for public review and comment."

NACDS also pointed out the need to provide clear guidance to states on the importance of accurate dispensing fees before using AMP-based FULs.

"To ensure that pharmacies are not reimbursed below the cost to acquire and dispense prescription medications to Medicaid patients, CMS should make clear to states that in order to maintain patient access to pharmacies, dispensing fees must be reviewed and adjusted to reflect no less than the true cost of dispensing prescription medications to Medicaid patients,” the letter stated.

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