Reps. Boyda, Emerson and 30 House Members Introduce Common-Sense Fixes to Medicaid Pharmacy Reimbursement Rule for Generic Prescription Drugs

To: POLITICAL EDITORS

Contact: John Norton, Public Relations Manager of the National Community Pharmacists Association, +1-703-600-1174, john.norton@ncpanet.org

ALEXANDRIA, Va., July 25 /PRNewswire-USNewswire/ — In a move to protect patient access to community pharmacies, the National Community Pharmacists Association (NCPA) praised Reps. Nancy Boyda (D-Kan.), Jo Ann Emerson (R-Mo.), and a bipartisan coalition of 30 House members for introducing H.R. 3140, the Saving Our Community Pharmacies Act of 2007. The bill provides four modifications to the Centers for Medicare & Medicaid Services (CMS) Medicaid generic prescription drug pharmacy reimbursement formula that will cause many community pharmacies to either limit the amount of Medicaid services they provide, get out of the program entirely, or even out of business.

CMS new formula is based on the Average Manufacturer Price (AMP) from the 2005 Deficit Reduction Acts mandate to find $8.4 billion in Medicaid cuts, 90 percent coming from pharmacy reimbursement — although pharmacy only represents 2 percent of Medicaid spending. This ill-advised objective was achieved by including several pricing categories that push down the typical acquisition costs to dispense drugs well below what community pharmacies actually pay. Rural and dense urban centers, which often lack many health outlets, are a common location for community pharmacies and have a substantial Medicaid customer base. The final rule was issued on July 6 and the implementation process begins on October 1 and is completed on January 30. At that point, community pharmacies will feel the full brunt of the reduced reimbursement.

Since Medicaid is designed to meet the health needs of poor and disabled Americans, with 50 percent being children, the prospects of community pharmacies struggling to be financially viable creates a slippery slope. When these vulnerable patients access to prescription drugs is limited, their health will be endangered, and expensive visits to emergency rooms and doctors offices will increase. In the most extreme cases of pharmacy stores closing their doors, all of their patients lose, such as those who get their medications from Medicare Part D.

H.R. 3140 seeks to rectify the pricing discrepancies and maintain the beneficial relationship between community pharmacists and patients by:

— Redefining the pharmacy reimbursement benchmark to accurately reflect pharmacy acquisition costs.

— Excluding all sales to mail order facilities, as well as any

pharmacy benefit manager (PBM) rebates and price concessions that

are not available to retail pharmacies.

— Properly defining the retail class of trade to only include retail

community pharmacies.

— Including provisions to drive generic utilization which would

increase taxpayer and government savings.

The Saving Our Community Pharmacies Act of 2007 prevents the calamity that will ensue if CMS draconian reimbursement guidelines are fully realized in a few months, said Bruce Roberts, RPh, NCPA Executive Vice President and CEO. We are working with Congress to quickly pass this critical bill to create an accurate benchmark for community pharmacy drug expenses by eliminating discounts they arent privy to, and establish cost-savings generic drug incentives.

Without H.R. 3140 becoming law, the economic losses community pharmacies will incur are significant. Information contained in the December 2006 Government Accountability Office (GAO) report and the 2006 NCPA-Pfizer Digest indicates that the total net profit for the average community pharmacy will fall by 60 percent under CMS AMP rule. Community pharmacies receive 92 percent of their revenue from prescription drugs, which means these types of losses cannot be made up through other revenue streams.

NCPA worked closely with the offices of Reps. Boyda and Emerson to craft this legislation. Other original cosponsors, who have shown strong support for fixing the problem, are Rep. Robert Aderholt (R- Ala.), Rodney Alexander (R-La.), Marion Berry (D-Ark.), Jo Bonner (R- Ala.), Dan Boren (D-Ok.), Rick Boucher (D-Va.), Charles Boustany (R- La.), Bruce Braley (D-Iowa), Chris Carney (D-Pa.), Elijah Cummings (D-Md.), David Davis (R-Tenn.), Geoff Davis (R-Ky.), Bobby Etheridge (D-N.C.), Terry Everett (R-Ala.), Sam Farr (D-Calif.), Bart Gordon (D-Tenn.), Brian Higgins (D-N.Y.), Pete Hoekstra (R-Mi.), Walter Jones (R-N.C.), Frank LoBiondo (R-N.J.), Dave Loebsack (D-Iowa), Dennis Moore (D-Kan.), Jerry Moran (R-Kan.), Solomon Ortiz (D- Texas), Mike Rogers (R-Ala.), Mike Ross (D-Ark.), Ike Skelton (D- Mo.), Todd Tiahrt (R-Kan.), Tim Walz (D-Minn.), and Anthony Weiner (D-N.Y.).

This bipartisan legislation is critical to maintaining patient access to their trusted community pharmacists who provide medical advice and fill their prescription drug needs, said NCPA president John Tilley, RPh, a pharmacy owner from Downey, Calif. Without Congress acting in an expeditious fashion, many more communities will see their access to life-saving prescription drugs jeopardized. This doesnt just affect Medicaid patients. A closed pharmacy means all of its patients lose, which is an outcome CMS will have created by not heeding the warnings of Congress, NCPA and other business and healthcare organizations who have long understood that the AMP formula would have devastating consequences.

The National Community Pharmacists Association, founded in 1898, represents the nations community pharmacists, including the owners of more than 23,000 pharmacies. The nations independent pharmacies, independent pharmacy franchises, and independent chains dispense nearly half of the nation’s retail prescription medicines. To learn more go to www.ncapanet.org.

SOURCE National Community Pharmacists Association

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