Retail groups object to proposed federal limits on generic reimbursement

January 31, 2012

Two key retail pharmacy groups, the National Association of Chain Drug Stores and the National Community Pharmacists Association, have renewed their opposition to proposed federal upper limits for generic drug reimbursement under Medicaid.

Two key retail pharmacy groups, the National Association of Chain Drug Stores (NACDS) and the National Community Pharmacists Association (NCPA), have renewed their opposition to proposed federal upper limits (FUL) for generic drug reimbursement under Medicaid.

Bipartisan groups of more than a dozen U.S. senators and 40 U.S. representatives have also written to the Centers for Medicare and Medicaid Services (CMS) opposing the proposed FUL lists.

CMS published its fourth proposed FUL list earlier this month. Each of the prior 3 lists has been amended in response to comments from industry and other interested parties.

The problem, NCPA noted in a response to Cindy Mann, director of CMS’ Center for Medicaid and CHIP Services, is that the current proposals continue to put pharmacy reimbursement well below acquisition cost for hundreds of generic drugs. Reimbursement would fall below acquisition cost for about 36% of all generics purchased by community pharmacies.

“If this set of FULs is implemented, it could result in the loss of access to community pharmacies for Medicaid patients,” NCPA warned. “This could result in negative health consequences and sharply increased Medicaid costs for other health interventions if Medicaid patients cannot obtain their prescription medications.”

FUL pricing is based on average manufacturer price (AMP). That means CMS cannot create appropriate FUL lists until and unless final AMP regulations are issued and several months of AMP data have been collected, NCPA said. The association called on CMS to defer FUL regulations until AMP has been settled. Congressional letters to CMS called for a similar delay in FUL until AMP issues are resolved.