NACDS, NCPA: Victory for Patients, Pharmacy as CMS Moves to Withdraw Provisions of “AMP” Rule Currently Blocked by Injunction


Alexandria, Va. - Sept. 3, 2010

The following is a statement issued today by National Association of Chain Drug Stores (NACDS) President and CEO Steven C. Anderson, IOM, CAE and National Community Pharmacists Association (NCPA) Acting Executive Vice President and CEO Douglas Hoey, RPh, regarding the proposed rule by the Centers for Medicare & Medicaid Services (CMS) that would withdraw existing provisions of the Medicaid pharmacy reimbursement formula under the average manufacturer price (AMP) model:

"We are pleased that the Centers for Medicare & Medicaid Services (CMS) has proposed a rule that would withdraw provisions of what is known as the Medicaid average manufacturer price (AMP) rule. The proposed rule calls for the withdrawal of existing provisions that define AMP, that determine the calculation of federal upper limits (FULs), and that define 'multiple source drug.' Put simply, all of these provisions relate to the reimbursement to pharmacies for generic Medicaid prescriptions, and thus impact patients' access to pharmacies. The move to withdraw these provisions is a victory for patient care as it is delivered in America's pharmacies every day.

"When we filed the lawsuit in 2007 we knew that patient care was at stake. It is important to point out that the withdrawal of these provisions is another step toward reducing what would have been major cuts to pharmacy reimbursement. The end result is not an increase in reimbursement to pharmacy, but rather the lessening of cuts that previously would have involved pharmacies selling most generic drugs at a loss, thereby threatening their long-term ability to provide patient care.

"We insisted that this policy was not appropriate. Separately, we also have urged that policymakers should recognize the ability of pharmacies and pharmacists to help improve health and reduce healthcare costs. We are gratified that this sense is reflected in the pharmacy provisions of the new healthcare reform law. The new law contains provisions ranging from dramatically reducing the AMP cuts, to advancing medication therapy management, through which pharmacists can help patients take their medications correctly, which is referred to as 'medication adherence.' The costs related to poor medication adherence have been estimated to reach $290 billion annually, or 13 percent of all healthcare expenditures. We urged that patient care should not be jeopardized, but rather that pharmacy be engaged more strategically for the good of patient health and healthcare delivery.

"We anticipate issuing formal comments on CMS' proposed rule to withdraw these provisions of the AMP rule, and we will continue to work with Congress and with CMS to advocate for access to pharmacy services for patients."

The National Association of Chain Drug Stores (NACDS) represents 140 companies - traditional drug stores, supermarkets, and mass merchants with pharmacies – from regional chains with four stores to national companies. NACDS members also include more than 900 pharmacy and front-end suppliers, and nearly 70 international members from 22 countries. Chains operate 39,000 pharmacies, and employ more than 2.7 million employees, including 118,000 full-time pharmacists. They fill nearly 2.6 billion prescriptions annually, which is more than 72 percent of annual prescriptions in the United States. The total economic impact of all retail stores with pharmacies transcends their $830 billion in annual sales. Every $1 spent in these stores creates a ripple effect of $1.96 in other industries, for a total economic impact of $1.57 trillion, equal to 11 percent of GDP. For more information about NACDS, visit www.NACDS.org.

The National Community Pharmacists Association, founded in 1898, represents the nation's community pharmacists, including the owners of more than 23,000 pharmacies. The nation's independent pharmacies, independent pharmacy franchises, and independent chains dispense nearly half of the nation's retail prescription medicines. To learn more go to www.ncpanet.org.

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