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Retail Rx Fights Medicaid Final Rule

WASHINGTON Retail pharmacy associations spoke out last week opposing the Medicaid generic drug reimbursement formula, released on July 6 by the Centers for Medicare & Medicaid Services, Baltimore. The new payment formula uses the Average Manufacturer Price of drugs rather than the previously used Average Wholesale Price. Although the rule was published as final, CMS is soliciting additional comments

WASHINGTON — Retail pharmacy associations spoke out last week opposing the “final” Medicaid generic drug reimbursement formula, released on July 6 by the Centers for Medicare & Medicaid Services, Baltimore.

The new payment formula uses the Average Manufacturer Price of drugs rather than the previously used Average Wholesale Price. Although the rule was published as final, CMS is soliciting additional comments on the definition of AMP.

The new formula will reimburse pharmacies an average of one-third below cost of these drugs, according to the National Association of Chain Drug Stores, Alexandria, Va.

After earlier outcry from retail pharmacy, some concessions were made. CMS removed low prices given to nursing homes and hospitals from the formula. However, it wasn't enough in that low prices given to mail-order pharmacies remained.

As it stands, “the calculation will reimburse pharmacists significantly below acquisition cost,” Robert Appel, spokesman for the National Community Pharmacists Association, Alexandria, Va., told SN.

The rule is “unacceptable” for community pharmacy, according to Steven C. Anderson, president and chief executive officer, NACDS, in a statement.

CMS argues that Medicaid payments for generics were much higher than acquisition costs.