AMP Battle Rages On -- Continued Support Needed by Community Pharmacists

On February 8, 2006, President George W. Bush signed into law the “Deficit Reduction Act of 2005” (DRA) which designated Average Manufacturers Price (AMP) as the basis for the Federal Upper Limit (FUL) on generic drugs dispensed by Medicaid. The rule established guidelines by which AMP will be used to cap Medicaid payments to pharmacies for “multiple source” (primarily generic) prescription medications and is calculated at 250% of the lowest AMP for therapeutically equivalent drugs. As defined in the current legislation AMP values would not be reflective of the prices that community pharmacies pay to acquire drug products.

This flawed definition could leave to severe underpayments to community pharmacies if AMP is used to set payment levels. In short, The DRA and the recent final regulations severely reduce pharmacy payments for generic drugs. These reductions could force many pharmacies to close or reduce hours or services, jeopardizing Medicaid beneficiary’s access to medications and pharmacy services.

To amend title XIX of the Social Security Act, S.1951, Fair Medicaid Drug Payment Act of 2007 and the House’s version of similar legislation to address this issue—H.R.3140, Saving Our Community Pharmacies Act of 2007 has been introduced to ensure and foster continued beneficiary access to generic drugs under the Medicaid Program by setting pharmacy reimbursement based on retail acquisition cost and to promote the use of generic drugs.

Due to the combined efforts of NCPA and your support, on Dec 14^th U.S. District Court Judge Royce Lamberth ruled that the Centers for Medicare & Medicaid Services will not be permitted to post data on the Internet related to AMP-of generic pharmaceuticals and more significantly granted an injunction that will prevent CMS from adopting the reduced AMP-based reimbursement formula for generic prescriptions which was set to take effect on Jan. 30, 2008. But the battle is not over and continued support on this critical issue needs to be maintained!

Please take the initiative to support NCPA against the rule of AMP by contacting your congressional delegation and asking for support of:

H.R.3140, Saving Our Community Pharmacies Act of 2007 and S. 1951, Fair Medicaid Drug Payment Act of 2007

Make your voice heard by clicking on the link:

http://capwiz.com/ncpanet/home/ (brings you to Legislative Alert Center)

For more information on these bills please go to:

http://www.ncpanet.org/leggovaffairs/#amp