Victory for Patients and Pharmacy: Motion to Dismiss "AMP" Lawsuit Follows CMS' Withdrawal of Contested Rule's Remaining Provisions

Alexandria, Va. - Dec. 14, 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. This statement was issued upon agreement with the Centers for Medicare & Medicaid Services (CMS) on a motion to dismiss the Medicaid average manufacturer price "AMP" lawsuit, a development made possible by CMS' withdrawal of the last remaining provisions of the AMP rule that had been blocked by a preliminary injunction following litigation by NACDS and NCPA:

"Today marks a vital triumph for pharmacy and patients. The agreement of CMS to stop applying federal upper limits (FULs) to all B-rated drugs after December 15 and to refrain from publishing AMPs calculated under the old AMP rule are the final steps that will allow the AMP lawsuit to be dismissed.

"Also effective December 15, 2010, CMS is formally withdrawing provisions of the AMP rule related to the definition of AMP, calculation of FULs and the definition of 'multiple source drug,' which was another victory for patient care.

"Combined with withdrawal of most of the AMP rule, these victories eliminate the need for the injunction that halted implementation of the AMP rule. Now that all of the issues raised in our AMP lawsuit have been resolved, there is nothing left to challenge at this time and we are pleased to have reached agreement with CMS on a motion to dismiss the lawsuit.

"Three years have passed since the filing of the lawsuit and the granting of the subsequent injunction which prevented devastating reimbursement cuts from being implemented. Since then, through legal, regulatory and legislative means, pharmacy has worked to help ensure that patient access to pharmacy services would not be compromised.

"In addition to the lawsuit, NCPA and NACDS urged policymakers to recognize the ability of pharmacies and pharmacists to help improve health and reduce healthcare costs, and are gratified that this sense is reflected in the pharmacy provisions of the new healthcare reform law. The law included provisions to reduce the AMP cuts and to advance medication therapy management (MTM), 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.

"Each day that the injunction remained in place resulted in the avoidance of crippling cuts in the amount of $5.5 million per day, for a total of approximately $5.75 billion from January 1, 2008 through today. These devastating cuts would very likely have created serious impediments for patients in accessing their medications and other pharmacy services. Patients are the clear winners in today's victory.

"We look forward to continue working with CMS in the implementation of the new AMP provisions and we will continue advocating energetically for sound public policy that provides access to quality pharmacy services for patients, which prevent more costly forms of healthcare over the long run."

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

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 or read NCPA's blog, The Dose, at

Ask Your Family Pharmacist TM