Express Scripts last week reached a $9.3 million settlement with 29 states resolving claims that it engaged in deceptive business practices by encouraging doctors to switch patients to different brand name drugs that would produce higher rebates for the giant PBM and were more expensive to plans and patients. As part of the settlement, the company is required to "significantly" change its business practices.The settlement is the third entered into in recent years by various groups of states and the country's largest PBMs aimed at cleaning up the industry. In February, Caremark agreed to pay $38.5 million and reform its business practices. In April 2004, Medco agreed to pay $29.3 million and end its malpractices.These settlements are not related to cases that certain PBMs have settled with the Department of Justice. In October 2006, Medco paid $155 million to settle civil fraud and kickback claims. In September 2005, AdvancePCS, now a Caremark subsidiary, resolved similar allegations with a $137.5 million payment. Both PBMs also were required to enter into extensive corporate compliance agreements with the government.
by the National Community Pharmacists Association
Friday, June 6, 2008
Thursday, June 5, 2008
Impact of AMP on states: report by Price Waterhouse Coopers
PriceWaterhouseCoopers claims that 11,105 pharmacies will close due to the Average Manufacturer Price (AMP) provisions in the Deficit Reduction Act of 2005 (DRA).
The Medicaid program pays retail pharmacies a dispensing fee plus a reimbursement rate meant to cover the cost of acquiring the drug from the manufacturer for Medicaid prescriptions. The federal government imposes a federal upper limit ("FUL") on reimbursement rates for certain generic drugs that states generally adopt under their Medicaid programs. The Deficit Reduction Act of 2005 ("DRA") generally decreased FULs by changing their calculation method, but litigation has prevented the new reimbursement levels from being implemented. The changes in the Medicaid reimbursement rates under the DRA would dramatically lower pharmacy reimbursement rates. The decline in the profitability of pharmacies participating in Medicaid could result in thousands of pharmacies closing, making pharmacies less accessible to Medicaid participants. If reduced accessibility of pharmacies made beneficiaries less likely to utilize prescription drugs, their health could be adversely affected.
The National Association of Chain Drug Stores and the Food Marketing Institute engaged PricewaterhouseCoopers to analyze the potential impact of the DRA on pharmacies by state.
Montana: DRA cuts could cause 51 pharmacies to close (24.6% of our rural pharmacies), affecting 324 direct jobs and 688 jobs across the entire state economy.
Please read the Full Report
The Medicaid program pays retail pharmacies a dispensing fee plus a reimbursement rate meant to cover the cost of acquiring the drug from the manufacturer for Medicaid prescriptions. The federal government imposes a federal upper limit ("FUL") on reimbursement rates for certain generic drugs that states generally adopt under their Medicaid programs. The Deficit Reduction Act of 2005 ("DRA") generally decreased FULs by changing their calculation method, but litigation has prevented the new reimbursement levels from being implemented. The changes in the Medicaid reimbursement rates under the DRA would dramatically lower pharmacy reimbursement rates. The decline in the profitability of pharmacies participating in Medicaid could result in thousands of pharmacies closing, making pharmacies less accessible to Medicaid participants. If reduced accessibility of pharmacies made beneficiaries less likely to utilize prescription drugs, their health could be adversely affected.
The National Association of Chain Drug Stores and the Food Marketing Institute engaged PricewaterhouseCoopers to analyze the potential impact of the DRA on pharmacies by state.
Montana: DRA cuts could cause 51 pharmacies to close (24.6% of our rural pharmacies), affecting 324 direct jobs and 688 jobs across the entire state economy.
Please read the Full Report
Sunday, June 1, 2008
Democrats to write their own bill for Medicare/ Medicaid Fix
05/21/2008
Baucus: No Bipartisan Deal For Medicare Payment Fix
by Anna Edney
Senate Finance Chairman Max Baucus has ruled out the possibility of reaching a bipartisan compromise on legislation to prevent Medicare physicians from taking a pay cut, saying today Democrats would move forward with their bill that will include offsets staunchly opposed by the White House. "It seems clear to me that we're not going to get agreement in time to meet the deadline," Baucus said after a meeting with Finance Committee members. The pay cut is set to take effect July 1. Republicans offered Democrats a counterproposal, but Democrats appear to have walked away from the table without giving the GOP an answer, a Republican aide said. The Republican offer included $10 billion in private Medicare Advantage cuts as well as marketing restrictions for the private plans and beneficiary improvements totaling $3 billion, a GOP aide said. Baucus was unsure how much his bill might cost, but previously estimated between $15 billion and $18 billion.Baucus said that the bill, which he will work on over Memorial Day recess, will prevent the 10 percent physician pay cut for 18 months and include an increase. Baucus was not sure what the pay increase would be but characterized it as "a little bump." The bill will be paid for through cuts in Medicare Advantage private fee-for-service and indirect medical education, offsets that are likely to draw a veto. The private fee-for-service plans are paid more than traditional Medicare plans to provide extra benefits, while indirect medical education payments are made to teaching hospitals but considered duplicative. The administration refuses to greenlight cuts to any private plans. "They're afraid of the White House," Senate Finance Health Subcommittee Chairman John (Jay) Rockefeller, D-W.Va., said of Republicans. "All they think about is will this get vetoed or not. They never think about will this help patients [and] beneficiaries."Baucus said the Democrats' bill will include electronic prescribing requirements and changes to an asset test for low-income beneficiaries to qualify for prescription assistance. The bill also will have a provision that pharmacy groups pushed for to require pharmacy benefit managers to reimburse pharmacies for Medicare prescriptions more quickly than the current payment period of 30 days or sometimes longer. Baucus expects the Democrats' bill to bypass the committee and go straight to the floor. Finance ranking member Charles Grassley said today he still will attempt to reach a compromise. If that does not happen, Grassley said, Republicans will offer their own proposal.
Baucus: No Bipartisan Deal For Medicare Payment Fix
by Anna Edney
Senate Finance Chairman Max Baucus has ruled out the possibility of reaching a bipartisan compromise on legislation to prevent Medicare physicians from taking a pay cut, saying today Democrats would move forward with their bill that will include offsets staunchly opposed by the White House. "It seems clear to me that we're not going to get agreement in time to meet the deadline," Baucus said after a meeting with Finance Committee members. The pay cut is set to take effect July 1. Republicans offered Democrats a counterproposal, but Democrats appear to have walked away from the table without giving the GOP an answer, a Republican aide said. The Republican offer included $10 billion in private Medicare Advantage cuts as well as marketing restrictions for the private plans and beneficiary improvements totaling $3 billion, a GOP aide said. Baucus was unsure how much his bill might cost, but previously estimated between $15 billion and $18 billion.Baucus said that the bill, which he will work on over Memorial Day recess, will prevent the 10 percent physician pay cut for 18 months and include an increase. Baucus was not sure what the pay increase would be but characterized it as "a little bump." The bill will be paid for through cuts in Medicare Advantage private fee-for-service and indirect medical education, offsets that are likely to draw a veto. The private fee-for-service plans are paid more than traditional Medicare plans to provide extra benefits, while indirect medical education payments are made to teaching hospitals but considered duplicative. The administration refuses to greenlight cuts to any private plans. "They're afraid of the White House," Senate Finance Health Subcommittee Chairman John (Jay) Rockefeller, D-W.Va., said of Republicans. "All they think about is will this get vetoed or not. They never think about will this help patients [and] beneficiaries."Baucus said the Democrats' bill will include electronic prescribing requirements and changes to an asset test for low-income beneficiaries to qualify for prescription assistance. The bill also will have a provision that pharmacy groups pushed for to require pharmacy benefit managers to reimburse pharmacies for Medicare prescriptions more quickly than the current payment period of 30 days or sometimes longer. Baucus expects the Democrats' bill to bypass the committee and go straight to the floor. Finance ranking member Charles Grassley said today he still will attempt to reach a compromise. If that does not happen, Grassley said, Republicans will offer their own proposal.
Thursday, May 29, 2008
Opposition to H.R.5839 by NCPA, NACDS, and FMI
NCPA, NACDS, FMI Oppose Unfunded E-Pedigree Mandate Retail pharmacy groups are united in their opposition to legislation as currently written that includes "an unproven, unfunded electronic pedigree/track and trace requirement." NCPA, the National Association of Chain Drug Stores, and the Food Marketing Institute, said in a letter to members of the House Energy & Commerce Committee:
"First, track and trace systems are many years away from full development and have not been thoroughly tested."
"Second, track and trace systems in their current form could be hugely disruptive to the efficient delivery of prescription drugs and pharmacy care."
"Finally, track and trace could be hugely expensive, costing each pharmacy location several thousands of dollars to purchase and install new hardware and software programs."
The groups said that they support the goal of the legislation, H.R.5839, to help secure the prescription drug distribution system against counterfeit drugs, but not the "unproven, disruptive, and costly" unfunded mandate.
from NCPAnet.org
"First, track and trace systems are many years away from full development and have not been thoroughly tested."
"Second, track and trace systems in their current form could be hugely disruptive to the efficient delivery of prescription drugs and pharmacy care."
"Finally, track and trace could be hugely expensive, costing each pharmacy location several thousands of dollars to purchase and install new hardware and software programs."
The groups said that they support the goal of the legislation, H.R.5839, to help secure the prescription drug distribution system against counterfeit drugs, but not the "unproven, disruptive, and costly" unfunded mandate.
from NCPAnet.org
Monday, March 17, 2008
AMP...Loose Ends?
The NCPA/NACDS Federal Court injunction bought us some time (about 6 months to a year) until we are able to provide a fix for AMP (Average Manufacture Price). This is the time we need to utilize our resources, pull together, and FIX AMP before it “fixes” us. Even though we need to work towards the AMP FIX goal, it is unlikely that S.1951/ H.R.3700 will get pushed through Congress this year. The physician Medicare fee cuts are coming up at the end of June and this is perhaps what we can “tie” another delay to. I know it seems kind of cheesy to delay only to delay again, but the alternative is much worse. Basically, if there isn’t time to fix AMP and find a large piece of legislation to “tie” it to in which to get through Congress (ie: Medicare package), then a delay is what we need for the time being. We already have Baucus and Tester on board in our Senate, we must have Congressman Rehberg on board as well. HR3700, the `Fair Medicaid Drug Payment Act of 2007' in the House of Representatives, is the exact same bill as Baucus’s S.1951 in the Senate. By the way Senator/ Presidential Candidate Barack Obama [IL] is a co-sponsor of S.1951 and S.1954 since 12/03/07.
Rehberg has been a wonderful supporter of community pharmacy but we need his help now more that ever! Bring these points to his attention: (Please also visit www.grizrph.com/spotlight.htm for more information on this important pharmacy legislation including SAMPLE LETTERS)
The devastating effects of AMP if implimented:
1. The Government Accountability Office (GAO) identified the reimbursement on average is 36% less than the acquisition costs for generic medications
2. Director of the PRIME Institute at the University of Minnesota, argued that with the 250% of AMP rule, as many as 10,000 to 12,000 pharmacies in rural and underserved urban communities would close, causing irrevocable harm
3. President Bush’s 2009 Fiscal Budget includes another 1.1 BILLION in cuts from pharmacy reimbursement which would equate to 150% of AMP not just 250% of AMP which would seal all our fates if ever enacted.
4. According to NCPA and CMS, community pharmacies would lose $5.5 million a day under the rule as written.
Why H.R.3700 and S.1951:
1. Remove mail order transactions and certain other discounts, rebates, and price concessions from calculation of AMP
2. Base pharmacy payment on average AMP, instead of the lowest AMP
3. Apply the AMP formula only when three or more alternatives are available, instead of two or more
4. Raise Medicaid payment to 300% of AMP instead of 250%
5. Require prior authorization for brand name drugs that are more expensive than other biologically and therapeutically equivalent drug products
6. Senator Baucus, the chair of US Senate Committee on Finance, and Representative Pallone, the chair of the Subcommittee on Health in the Energy and Commerce Committee, are in strong positions to move their respective legislation.
7. Make sure to ask him to co-sponsor H.R.3700 as well as attach a delay to the June 30th physician Medicare cut bill.
8. Don’t forget to thank him for his support on H.R.971, and H.R.1474.
Sample letter to Congressman Rehberg (HR 3700) ; Bag Stuffers for loyal customers; Contacts for Congressman Rehberg.
Rehberg has been a wonderful supporter of community pharmacy but we need his help now more that ever! Bring these points to his attention: (Please also visit www.grizrph.com/spotlight.htm for more information on this important pharmacy legislation including SAMPLE LETTERS)
The devastating effects of AMP if implimented:
1. The Government Accountability Office (GAO) identified the reimbursement on average is 36% less than the acquisition costs for generic medications
2. Director of the PRIME Institute at the University of Minnesota, argued that with the 250% of AMP rule, as many as 10,000 to 12,000 pharmacies in rural and underserved urban communities would close, causing irrevocable harm
3. President Bush’s 2009 Fiscal Budget includes another 1.1 BILLION in cuts from pharmacy reimbursement which would equate to 150% of AMP not just 250% of AMP which would seal all our fates if ever enacted.
4. According to NCPA and CMS, community pharmacies would lose $5.5 million a day under the rule as written.
Why H.R.3700 and S.1951:
1. Remove mail order transactions and certain other discounts, rebates, and price concessions from calculation of AMP
2. Base pharmacy payment on average AMP, instead of the lowest AMP
3. Apply the AMP formula only when three or more alternatives are available, instead of two or more
4. Raise Medicaid payment to 300% of AMP instead of 250%
5. Require prior authorization for brand name drugs that are more expensive than other biologically and therapeutically equivalent drug products
6. Senator Baucus, the chair of US Senate Committee on Finance, and Representative Pallone, the chair of the Subcommittee on Health in the Energy and Commerce Committee, are in strong positions to move their respective legislation.
7. Make sure to ask him to co-sponsor H.R.3700 as well as attach a delay to the June 30th physician Medicare cut bill.
8. Don’t forget to thank him for his support on H.R.971, and H.R.1474.
Sample letter to Congressman Rehberg (HR 3700) ; Bag Stuffers for loyal customers; Contacts for Congressman Rehberg.
Friday, January 11, 2008
NEW OIG REVIEW
In addition, please visit GrizRPh NEWS on www.grizrph.com for the new Office of Inspector General (OIG) report for the new figures on Medicare reimbursement to community pharmacies. Thanks to Tobey Schule for sharing this report with us. Please click on the pdf link to veiw the full document.
Here is a very brief summary:
This review was conducted at the request of 33 Senators. Medicare Part D payments, excluding dispensing fees, to local, community pharmacies exceeded the pharmacies' drug acquisition costs by an estimated 18.1 percent when the analysis included rebates that drug wholesalers paid to pharmacies. Excluding rebates, Part D payments exceeded drug acquisition costs by an estimated 17.3 percent. The estimated difference between Part D payments and drug acquisition costs was $9.13 per prescription including rebates and $8.78 excluding rebates. The estimated average Medicare Part D dispensing fee paid to local, community pharmacies was $2.27 per prescription, about $2 less than the average Medicaid dispensing fee. It was recommended that Congress and CMS consider the results of the review, including the data provided, in any deliberations regarding Medicare Part D reimbursement. CMS concurred with the recommendation.
Here is a very brief summary:
This review was conducted at the request of 33 Senators. Medicare Part D payments, excluding dispensing fees, to local, community pharmacies exceeded the pharmacies' drug acquisition costs by an estimated 18.1 percent when the analysis included rebates that drug wholesalers paid to pharmacies. Excluding rebates, Part D payments exceeded drug acquisition costs by an estimated 17.3 percent. The estimated difference between Part D payments and drug acquisition costs was $9.13 per prescription including rebates and $8.78 excluding rebates. The estimated average Medicare Part D dispensing fee paid to local, community pharmacies was $2.27 per prescription, about $2 less than the average Medicaid dispensing fee. It was recommended that Congress and CMS consider the results of the review, including the data provided, in any deliberations regarding Medicare Part D reimbursement. CMS concurred with the recommendation.
AMP
AMP
On 12/19/2007, Royce C. Lamberth, United States District Judge, signed Court Orders to postpone AMP (Average Manufacture Price) and to postpone the posting of AMP on a public website. At this time, if there is no appeal to the courts by CMS, which will cause further delays, this will give us some time to try to get something passed that makes sense so pharmacies can keep their doors open to Medicaid patients. Thanks to NCPA and NACDS for their strategic lawsuit and thanks to all those individuals who put forth so much effort trying to convince Congress of CMS’s ill conceived AMP proposal. NCPA’s Chris Parinello explained we have about 2 months, hopefully longer, for the lawsuit to hold and hopefully we are able to get a further delay at least until June about the time the physicians Medicaid bill gets revisited after their delay, and pass legislation to fix AMP…much more on this issue later.
On 12/19/2007, Royce C. Lamberth, United States District Judge, signed Court Orders to postpone AMP (Average Manufacture Price) and to postpone the posting of AMP on a public website. At this time, if there is no appeal to the courts by CMS, which will cause further delays, this will give us some time to try to get something passed that makes sense so pharmacies can keep their doors open to Medicaid patients. Thanks to NCPA and NACDS for their strategic lawsuit and thanks to all those individuals who put forth so much effort trying to convince Congress of CMS’s ill conceived AMP proposal. NCPA’s Chris Parinello explained we have about 2 months, hopefully longer, for the lawsuit to hold and hopefully we are able to get a further delay at least until June about the time the physicians Medicaid bill gets revisited after their delay, and pass legislation to fix AMP…much more on this issue later.
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