The need for S.1951 and House's version of similar legislation to address this issue-H.R.3140, the Saving Our Community Pharmacies Act of 2007-can be traced to the ill-conceived 2005 Deficit Reduction Act, which created an unrealistic AMP reimbursement formula. Although pharmacies only represent two percent of Medicaid spending, 90 percent of the cuts come from pharmacy reimbursement. It is clear CMS went beyond their mandate in the final rule by including special pricing in the calculation of AMP that are not unavailable to community pharmacies.

Since community pharmacies are often located in rural and dense urban areas that have high percentages of Medicaid recipients-over 50 percent who are children-the impact will be felt the most where it can be afforded the least. Information gleamed from the GAO report and the 2006 NCPA-Pfizer Digest-a comprehensive report on the financial health of community pharmacies nationwide-concludes total net profit for average community pharmacies will fall by 60 percent under CMS' AMP formula. With community pharmacies having 92 percent of their revenue come from prescription drugs; participation in Medicaid will be financially crippling.


"Medicaid's main objective of providing economically vulnerable citizens with health care has been discarded by CMS' AMP formula and it's damaging real-world consequences," said NCPA president John Tilley, RPh, a pharmacy owner from Downey, Calif. "Prescription drugs access should not depend on where someone lives, but if you are a Medicaid patient who relies upon a community pharmacy in an underserved locale, that is the challenge you may soon face. We believe that outcome can only be avoided if members of the Senate and House listen to or visit pharmacies, Medicaid patients, and other health and business experts. It is our expectation that with a complete picture of what's really at stake, the respective Senate and House bills addressing the badly-crafted, CMS final rule will be on the fast-track to becoming law."

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 www.ncpanet.org .



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