NACDS, NCPA: Victory for Patients, Pharmacy as CMS Issues Final Rule to Withdraw Provisions of "AMP" Rule Currently Blocked by Injunction


Alexandria, Va. - Nov. 12, 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) Executive Vice President and CEO Kathleen Jaeger regarding the final rule issued by the Centers for Medicare & Medicaid Services (CMS) to withdraw existing provisions of the Medicaid pharmacy reimbursement formula under the average manufacturer price (AMP) model:

"The Centers for Medicare & Medicaid Services (CMS) move to withdraw provisions of the Medicaid pharmacy reimbursement formula under the average manufacturer (AMP) model is a victory for patients and pharmacy.

"This final rule removes the existing provisions that define AMP, that determine the calculation of federal upper limits (FULs), and that define a 'multiple source drug.' These provisions relate to the reimbursement to pharmacies for generic Medicaid prescriptions, and can thus impact patients' access to pharmacies.

"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 and access.

"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 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 154 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 over 70 international members from 24 countries. Chains operate 37,000 pharmacies, and employ more than 2.5 million employees, including 118,000 full-time pharmacists. They fill more than 2.5 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 $815 billion in annual sales. Every $1 spent in these stores creates a ripple effect of $3.82 in other industries, for a total economic impact of $3.11 trillion, equal to 26 percent of GDP. For more information about NACDS, visit www.NACDS.org.

The National Community Pharmacists Association (NCPA®) represents the interests of America's community pharmacists, including the owners of more than 23,000 independent community pharmacies, pharmacy franchises, and chains. Together they represent a $93 billion health-care marketplace, have more than 315,000 employees including 62,400 pharmacists, and dispense over 41% of all retail prescriptions. To learn more go to www.ncpanet.org or read NCPA's blog, The Dose, at http://ncpanet.wordpress.com.

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