ALEXANDRIA, Va. -- The National Community Pharmacists Association (NCPA) strongly supports Senate Finance Committee Chairman Max Baucus (D-Mont.) introduction of S.1951, the Fair Medicaid Drug Payment Act of 2007. Sens. Blanche Lincoln (D-Ark.), Ken Salazar (D-Colo.), Pat Roberts (R-Kan.), Thad Cochran (R-Miss.), Gordon Smith (R-Ore.), Trent Lott (R-Miss.), and Joe Lieberman (D-Conn.) are also original cosponsors. The bill improves upon the Centers for Medicare & Medicaid Services' (CMS) final rule for Medicaid pharmacy generic prescription drug reimbursement that is based on an Average Manufacturer Price (AMP) formula. The improvements are critical because the current policy reimburses well below actual pharmacy acquisition costs-a conclusion supported by reports from the Government Accountability Office (GAO) and Health & Human Services Office of Inspector General.

When AMP is fully implemented on January 30, many community pharmacies will have to reduce or drop their participation in Medicaid, and pharmacies with high percentages of Medicaid recipients may even go out of business. With access to prescription drugs limited, many Medicaid patients' health will be jeopardized and visiting expensive emergency rooms and doctors' offices will be more commonplace. S.1951 contains five important provisions:

- It removes discounted mail order and pharmacy benefit manager prices that are unavailable to community pharmacies and unfairly lower the overall AMP formula.
- It requires Medicaid payment be calculated using the weighted average of the Medicaid generic drugs based on utilization.

- It restores the previous practice of using three available generic products in calculating the Federal Upper Limits that are used for setting adequate pharmacy reimbursements.

- It increases Medicaid reimbursement from 250 percent of the AMP to 300 percent in order to ensure pharmacies are not reimbursed below costs.

- It encourages more inexpensive generic drug usage by requiring prior authorization of brand name drugs.

"Senators Baucus, Lincoln, Salazar, Roberts, Cochran, Smith, Lott and Lieberman each recognize the need to act before the horrendous Medicaid reimbursement rule fully metastasizes and spawns an economically-driven health care crisis," said Bruce Roberts, RPh, NCPA executive vice president and CEO. "The Fair Medicaid Drug Payment Act provides community pharmacies with much fairer compensation for their participation in the Medicaid program by changing the most egregious elements of CMS' AMP rule. The bill goes a long way towards alleviating the serious threat to community pharmacies' viability, patients' health, and taxpayers' financial obligations. It also means that both the Senate and the House-which introduced their own legislative remedy in late July-are on track to beat the late January deadline for the final rule to begin taking its toll on patients and the healthcare system."

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