Coalition Urges Senate to Pass Medicaid Drug Payment Bill

The Generic Pharmaceutical Association has joined with pharmacy groups in sending a letter to members of the Senate urging them to pass legislation that would remedy what they say are “severe cuts” to Medicaid reimbursement for generic drugs.

Earlier this year, the Centers for Medicare & Medicaid Services (CMS) issued a final rule altering how average manufacturer price (AMP) is calculated and establishing a federal upper limit (FUL) for Medicaid reimbursement of multisource, or generic, drugs based on 250 percent of the lowest AMP. Some said the rule could cause pharmacies to lose money when dispensing generics and change how much manufacturers pay in Medicaid rebates.

Sen. Max Baucus (D-Mont.) introduced the Fair Medicaid Drug Payment Act, S. 1951, in August to encourage the continued dispensing of generics. Rep. Frank Pallone (D-N.J.) introduced the companion bill, H.R. 3700.

The bill would eliminate the requirement of the CMS to post AMP data online, base FULs on 300 percent of the weighted average AMP and restore the definition of a multisource drug to one with at least three equivalent versions, rather than two. The groups’ Nov. 16 letter asks Senate lawmakers to pass S. 1951 as soon as possible, before the CMS posts the new AMP data on its website in December or January.

The letter is available at www.nacds.org/user-assets/pdfs/newsrelease/2007/joint_letter.pdf. S. 1951 is available at thomas.loc.gov/cgi-bin/bdquery/z?d110:s.01951:.