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Pharmacy presses Medicaid lawsuit.


WASHINGTON -- The National Association of Chain Drug Stores and the National Community Pharmacists Association (NCPA) have followed up their lawsuit against the Centers for Medicare and Medicaid Services (CMS) with a motion requesting an expedited review of the suit, which names the Health and Human Services Department as a codefendant. The motion is supported by a report that details several violations of the Social Security Act by the CMS final rule, which reduces Medicaid pharmacy reimbursements.

The supporting study is by Stephen Schondelmeyer, head of the department of pharmaceutical care and health systems at the University of Minnesota's College of Pharmacy (see related story). At press-time a hearing on the request for a preliminary injunction against the reimbursement reductions had been scheduled for December 14.

In a joint statement Steve Anderson, president and chief executive officer of NACDS, and Bruce Roberts, executive vice president and chief executive officer of NCPA, explained that the motion was necessary with implementation of the CMS rule looming next month. In addition, the motion seeks to block CMS from posting data that Schondelmeyer contends may be inaccurate on a public web site this month.

"Because this data is fundamentally flawed, it would serve as a disservice to consumers and third-party payers, who may be duped into believing it may serve as a benchmark for their financial transactions," they state.

The motion filed by the two trade organizations in mid-November contends that CMS' final rule on the average manufacturer price (AMP) violates the Social Security Act's definition of AMP by including many transactions that are not prices paid by wholesalers for drugs distributed to retail pharmacies. Examples include direct sales to patients, physicians, various specialized medical centers, clinics and hospital outpatient pharmacies.

It further argues that the AMP rule ignores the Social Security Act's requirements for establishing Federal Upper Limits on reimbursement for multiple-source drugs. Specifically, it points out that the final rule ignores the statutory requirement that the drugs used to calculate the upper limit must be generally available to the public through retail pharmacies within each state where the upper limit will be applied.

Finally, the motion maintains that the rule contradicts a statutory requirement that Federal Upper Limits may only be applied to "therapeutically equivalent" drugs.

The motion goes on to warn that CMS has not only used flawed AMPs to establish Federal Upper Limits on reimbursement for generic drugs, but will publish flawed AMPs for all drugs--both branded and generic--on the public web site, causing further harm both to retail pharmacy and to the public.

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Publication:Chain Drug Review
Geographic Code:1USA
Date:Dec 17, 2007
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