APRx News -- Medicaid Meeting Draws Big McAllen Crowd

October 20, 2011

Valley Meeting Brings New Members, More Support for Medicaid Rx Fight

More than 100 community pharmacists and other interested individuals attended a recent APRx/TPBC meeting held in McAllen to help South Texas pharmacists learn more about our ongoing efforts to fight the flawed transition to managed care for Texas Medicaid drug benefits.

Member and non-member pharmacies alike came to hear an update on October 12 at the McAllen Convention Center on legal activities in the APRx Medicaid lawsuit. APRx General Counsel Amanda Gohlke Fields spoke along with Miguel Rodriguez and Don Taylor from the Taylor Dunham LLP law firm, which represents APRx in its Medicaid-related suit against the Texas Health & Human Services Commission. Fields also provided an update on the ongoing efforts on the Medicaid issue by the Texas Pharmacy Business Council, APRx's advocacy arm.

The meeting was covered by several South Texas television outlets and interviews with Fields, Rodriguez and APRx President Mike Gohlke later appeared on several South Texas stations. Several non-member pharmacies joined the American Pharmacies cooperative after learning about all that APRx and TPBC are doing to fight for independent pharmacy. APRx also collected more than $6,000 in actual contributions to the APRx Legal Defense Fund, plus pledges for more.

NCPA Lists Major Concerns in Letter to CMS
on AMP Data Used in Medicaid Drug Pricing

In an effort to preserve access to community pharmacies for millions of Americans, the National Community Pharmacist Association (NCPA) has offered federal Medicaid officials a number of suggestions to address flawed drug-pricing methodology that could produce devastating cuts in Medicaid pharmacy reimbursement for a wide range of generic drugs.

In a letter to the Centers for Medicare and Medicaid Services (CMS), NCPA detailed a number of shortcomings in the Average Manufacturer Price (AMP) data on which CMS is relying to calculate new caps on Medicaid pharmacy reimbursement, known as Federal Upper Limits (FULs), for multiple source, generic prescription drugs.

NCPA's letter raises several issues:

The AMP data on which CMS is relying does not accurately reflect acquisition costs for community pharmacies. Even at the reimbursement baseline established in the Affordable Care Act (175 percent of the weighted average AMP), there are hundreds of products on CMS' proposed list with FULs that are below an independent community pharmacy's acquisition costs.
Inconsistency among drug manufacturer practices may contribute to the below-market FULs. The lack of guidance from CMS to manufacturers in terms of fully defining AMP has resulted in widely varying manufacturer practices in calculating AMP values.
Insufficient manufacturer data. The FULs are based on one month's AMP data, without regard to the statutorily required "smoothing process" to help avoid wild fluctuations from month to month.
CMS should recognize independent community pharmacies' higher drug acquisition costs. Despite aggressive efforts to negotiate lower prices, community pharmacies' acquisition costs are often 25% - 50% higher than those of publicly held chains.
CMS should fully resolve these and other issues before publishing its final, revised FULs. The publication by CMS of below-market reimbursement caps, such as those initially proposed, could prompt more health plans to adopt a flawed reimbursement standard.

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Important Reminder on Medicare Part D Transfers

As in previous years, Medicare Part D plan sponsors -- or any Medicaid pharmacy seeking to have Part D patients transferred to that pharmacy -- must send a written transfer request to the Medicare enrolee.

By federal law, the Medicare enrollee must be afforded the opportunity to approve the transfer in writing. Part D plan sponsors and pharmacies seeking the transfer are prohibited from phoning any Medicare patient to seek a transfer. CMS has provided a model transfer letter for plan sponsors and pharmacies to use.

If you have patients complaining of aggressive phone calls from Part D plans that are attempting to persuade them to transfer pharmacy benefits to mail order, please be sure to contact the National Community Pharmacists Association (NCPA) with the plan name and any other details your patient can provide.

Your Advocacy Team

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APRx is proud to lead the legal fight to protect fair competition, fair payment and patients' right to choose a pharmacy. These suits are critical - and costly. Help us keep up the fight!

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APRx Legal Defense Fund

802 N. Carancahua, Suite 1830

Corpus Christi, TX 78401

Your APRx Board

Vance Oglesbee, R.Ph.

Chairman

Robert Kinsey, R.Ph.

Vice Chairman

Bruce Rogers, R.Ph.

Secretary/Treasurer