NCPA, congressmen discuss Medicaid drug reimbursement cuts

WASHINGTON The National Community Pharmacists Association on Wednesday held a conference call in an attempt to raise awareness around the threat Medicaid generic prescription drug reimbursement cuts, which are based on an average manufacturer price formula, pose to pharmacies and patients.

The cuts, delivered by the Centers for Medicare and Medicaid Services, would cut payments to retail pharmacies by $11.8 billion over 10 years, according to the Congressional Budget Office.

Joining NCPA on the call were Reps. Marion Berry, D-Ark., and Jerry Moran, R-Kan.

“For many years I have been baffled [about the attitude the Centers for Medicare and Medicaid Services] and that crowd has had toward retail pharmacy,” Berry said. It doesn’t take a genius, he said, to realize that a pharmacy needs to be compensated, at the very least, for the cost actually paid for the pharmaceuticals. And it’s not unreasonable to expect compensation for professional services, Berry added.

“CMS has been, in my opinion, very difficult to deal with on this issue … and unwilling to work with” either retail association leaders or Congress members, Moran added. There are eight counties in Kansas that have no pharmacy at all,” Moran said, and it’s such issues as this that discourages any pharmacist to set up shop in those eight counties.

A federal injunction and a recently expired Congress moratorium have to date delayed implementation of the cuts, which according to NCPA would force some pharmacies to limit participation, drop out of the Medicaid program or even go out of business. John Coster, NCPA SVP government affairs, suggested that these cuts may have greater import across independent pharmacies because of the greater exposure to the Medicaid population. “The average independent fills twice as many Medicaid prescriptions as chain [pharmacies],” he said. And Medicaid reimbursements can represent as much as half of an independent’s business, he added, especially as prescription revenue represents more than 90% of an independent’s business on average.

The House and Senate are presently reconciling two different versions of healthcare reform that include different solutions for restoring portions of the cuts to Medicaid generic prescription drug reimbursements. The House version sets reimbursement at 130% of the weighted average AMP, while the Senate version sets it at no less than 175% of the weighted average AMP.

“Even the [Government Accountability Office] says the reimbursement is below the cost of the medicines for the pharmacies,” Berry said. The House bill is similarly challenging to pharmacies, he added. “The Senate bill is a little bit better but certainly not perfect.”

“[Reimbursement] of 175% [of AMP] is the minimum that we would need,” Coster said, noting that NCPA had been advocating reimbursements as high as 200% to adequately cover costs.