ccpa SPEAKS OUT: Coalition Pushes for Revised AMP Definition

Next year, the Coalition forCommunity Pharmacy Action(CCPA) will be committing a significantamount of energy and resourcesto Medicaid reimbursement issues—both in the newly elected 110th Congressand in state legislatures across theland.

Community pharmacy plays a vital rolein the Medicaid program, and changesmade to the Medicaid policy can have asignificant impact on pharmacy operations.It is imperative to make certain thatMedicaid beneficiaries have access tothe medications they need from thehealth care professionals they trust—their community pharmacists—in a mannerthat is cost-effective, without sacrificingpatient safety.

As Congress works to reduce federalspending, however, Medicaid reimbursementsto pharmacy have become a targetfor cuts. Lower pharmacy reimbursementrates under Medicaid could resultin a reduction of pharmacy services forpatients, could mean longer lines andshorter hours as store staffs are cutback, and could even result in store closures.We at CCPA, the governmentaffairs coalition forged by the NationalCommunity Pharmacists Association(NCPA) and the National Association ofChain Drug Stores, are focusing much ofour attention on a fair redefinition ofAverage Manufacturer Price (AMP).Earlier this year, Congress ordered thatAMP be used as the basis for Medicaidreimbursement for generic drugs in2007. AMP is a proprietary numberknown only to the manufacturers whoreport it and to the Centers for Medicare& Medicaid Services (CMS), which collectsthe data for rebate purposes.

AMP was created as a benchmark forrebate payments paid by manufacturersto state Medicaid programs. As such,there is an inherent desire on the part ofthe manufacturer to report the lowestprice possible. CMS should redefine AMPso that it reflects only manufacturers'sales to, and price concessions actuallyreceived by, traditional communitybasedretail pharmacies. CCPA recommendsthe following:

•We ask that members of Congresscontact the secretary of Health andHuman Services and ask that AMPbe defined so that it reflects pharmacies'total ingredient cost. If AMPwas defined so that it covers 100% ofpharmacists' ingredient costs, thenan adequate reimbursement couldbe attained. NCPA and the coalitionare on Capitol Hill every day representingcommunity pharmacists' interests, but we need you to encourageyour senators and representativein Washington to contact thesecretary and make this request.

•We ask that the study of pharmacyreimbursement called for in theDeficit Reduction Act, enacted earlierthis year, include an analysis of statedetermineddispensing fees to ensurethat pharmacy operating costsare adequately covered under statereimbursement formulas.

•We want CMS to limit the scope ofAMP data released to the states untilAMP is redefined. This will preventstates from inadvertently usingflawed AMP data to set pharmacyreimbursement rates.

Mr. Roberts is executive vice presidentand chief executive officer ofthe National Community PharmacistsAssociation.

The Coalition for CommunityPharmacy Action (CCPA) is analliance between the NationalAssociation of Chain Drug Stores(NACDS) and the NationalCommunity PharmacistsAssociation (NCPA), whichtogether represents more than55,000 community pharmacies.CCPA leverages the support,effort, and infrastructure ofNACDS and NCPA while engagingcommunity pharmacy to participateand advocate on issuesaffecting the industry.