Baucus bill a mixed bag for pharmacy

WASHINGTON Pharmacy retailers found some things to like and some things to fret about in a detailed health overhaul bill unveiled Wednesday by Sen. Max Baucus, D-Mont., the chairman of the Senate Finance Committee.

Many elements of the so-called Baucus bill, dubbed the “America’s Healthy Future Act,” mirror proposals laid out last week by Pres. Obama in his major address to Congress on health reform. Like the President, the $856 billion overhaul plan hammered out by the so-called “gang of six” on the Finance Committee over the summer envisions extending health coverage to all Americans and requiring all U.S. citizens to purchase health insurance. Both proposals would also levy new taxes and fees to help pay for the health reform package, and both would prohibit insurers from dropping coverage or overcharging people for insurance because of pre-existing conditions.

The biggest difference: unlike the White House’s health package, the Senate plan doesn’t call for the creation of a government-run insurance option. Instead, the Baucus bill would fund a new purchasing exchange where consumers could compare costs and options among different private insurance plans.

For community pharmacy leaders, the Senate plan is a mixed bag. The National Community Pharmacists Association commended Baucus for including several provisions the group sees as critical to pharmacy, including a somewhat more generous reimbursement formula for Medicaid prescriptions and provisions that eliminate hurdles to the sale of durable medical equipment by retail pharmacies.

“Community pharmacies have long had an ally in Chairman Baucus and we thank him for incorporating a number of important provisions in his proposal,” said NCPA EVP and CEO Bruce Roberts. “This legislation is a welcome starting point for health care reform in the Senate.

“First, Medicaid reimbursement levels for generic drugs are currently scheduled to plummet far below even the drug’s acquisition cost. Such losses would force many pharmacies out of the program or to close altogether,” Roberts noted. “Recognizing this, the Baucus proposal sets federal upper limits for the reimbursement of Medicaid generic drugs at 175% of the weighted average of the average manufacturer’s price. While we’re still analyzing the full impact of this change, no other health reform proposal goes so far to ensure community pharmacies can continue serving Medicaid beneficiaries.

“We hope the Finance AMP formula carries the day or is increased in order to create a workable reimbursement level for community pharmacies,” he added.

Roberts also praised the Baucus plan for exempting small pharmacies from new and burdensome requirements regarding the sale of DME. “About 90% of the approximately 23,000 independent community pharmacies offer some form of DME to patients, primarily diabetes testing supplies,” he pointed out. “Medicare’s costly and redundant accreditation requirements, effective Oct. 1, are forcing most of these community pharmacies out of the market.

“As a result, Medicare patients would have fewer choices and have to travel much greater distances for these critical items,” Roberts said. “Fortunately, the Baucus proposal exempts small pharmacies – already regulated and licensed by states – from the DME accreditation requirements.”

The National Association of Chain Drug Stores, for its part, reacted with a mixture of support and caution when Baucus’ Senate panel unveiled a preliminary draft of the health reform proposals last week. In a statement, NACDS president and CEO Steve Anderson said his group remains “extremely concerned that an insufficient ‘multiplier’ for establishing federal upper payment limits for generic drugs could have extremely negative consequences for pharmacies and their low income patients,” adding that NACDS “has questions” about the 175% formula.

“That being said, NACDS strongly commends the framework’s adoption of a ‘weighted average’ AMP rather than the lowest AMP to set FULs, as was the case under the Deficit Reduction Act of 2005,” Anderson added. “The use of a weighted average AMP would deliver a much needed improvement that takes into account the wide range of market prices for generic drugs.”