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Montana Community Pharmacy Owner Thanks Sen. Baucus for Including Common-Sense Reimbursement Provisions in Medicare Bill
Date:6/10/2008

MISSOULA, Mont., June 10 /PRNewswire-USNewswire/ -- Sen. Max Baucus (D-MT), chair of the Senate Finance Committee, has introduced a Medicare bill -- S.3101 -- that includes pharmacy-related provisions to provide prompt payment of Medicare Part D prescription drug claims and delay the implementation of Medicaid reimbursement cuts for generic prescription drugs. In response, Eric R. Shields, RPh, owner of A & C Drug in Missoula, MT and a member of the National Community Pharmacists Association (NCPA), issued the following statement:

"I wanted to personally thank Senator Baucus for his strong leadership in introducing S.3101, which is a health care bill that includes two provisions that ensure patients will continue to have access to community pharmacies in Montana and across America.

"The first provision ends the deliberately slow payment of Part D claims that force community pharmacies to maintain cash flow by taking out huge loans; while the second one delays the implementation of a fundamentally-flawed Medicaid reimbursement formula that forces community pharmacies to be reimbursed below actual generic prescription drug cost. Senator Baucus recognizes that community pharmacies are on the frontlines of our nation's health care system, and that these flawed pharmacy reimbursement policies were threatening to put community pharmacies out of business."

BACKGROUND:

Prompt Payment

In 2006, the first full year of Medicare Part D's implementation, five percent of America's community pharmacies permanently closed their doors. Ever since Part D's implementation on Jan. 1, 2006, community pharmacies have experienced cash-flow problems that have necessitated the need for loans in the tens to hundreds of thousands dollars. The pharmacy benefit managers (PBMs) responsible for administering the various Part D plans are paid by the government in advance, and could help remedy the problem, but rather than paying promptly, they choose to earn interest on the government's payment, and pay pharmacies late for their services.

Average Manufacturer Price

The new Medicaid reimbursement formula is based on the Average Manufacturer Price (AMP) from the 2005 Deficit Reduction Act's mandate to find $8.4 billion in Medicaid cuts, 90 percent coming from pharmacy reimbursement -- although pharmacy only represents 2 percent of Medicaid spending. A Government Accountability Office Study from December of 2006 found that on average, pharmacies would get reimbursed 36 percent below cost. This objective was achieved by including several pricing categories that push down the typical acquisition costs to dispense drugs below what community pharmacies pay. The final rule was issued on July 17, 2007 and the implementation process was slated to end January 30, 2008. To stop this from taking effect, NCPA and the National Association of Chain Drug Stores (NACDS) filed a successful lawsuit that stopped the implementation from occurring in late 2007. The legal process is still ongoing.

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


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SOURCE National Community Pharmacists Association
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