1. 100 percent pass-through of ALL DIVIDENDS and REBATES;
2. Drug costs based on ACTUAL ACQUISITION price; and
3. FULL AUDITING rights assure all contractual agreements are met.

There are only two possible explanations for these state agencies turning down the chance to save millions of dollars for taxpayers:

1. Fear of the unknown and/or comfort in "the way it's always been done."
2. Guidance by an outside contractor unwilling or unable to learn more about a better way to conduct business.

The "he said/he said" facing this joint committee can be settled easily enough:

1. Ask the PBMs or the state agencies for an example of a transparent PBM contract that was more expensive that the traditional model. We will provide examples of transparent contracts that generated significant savings.
2. Rewrite the RFPs using transparency guidelines and see the quality and value of the bids based on a transparent contract.
3. Or take advantage of the offer by one of the PBM panelists to pay for an independent consultant to analyze and compare the traditional state plan with a transparent model-remember, at NO COST to the state.

With the potential savings to the state estimated at $60 to $100 million, how can the proposed traditional PBM contracts go forward without full due diligence.

By Bruce Roberts, RPh, EVP, National Community Pharmacists Association

That injunction stopped the Medicaid AMP cuts from being implemented as scheduled on Jan. 31. Even according to CMS, the harm, especially to NCPA members, would have been $5.5 million a day.

We don't know why there was no appeal. We could speculate that the government knew it was unlikely to win on appeal, but we just don't know. What we do know is that the injunction remains in place, the case NCPA and NACDS filed against CMS is proceeding, and any AMP rule, new or old, is months away-if not into next year.

Right now, we are waiting for CMS to produce the administrative record of how it fashioned the initial wrong-headed rule issued July 17, 2007. Who did the federal rule makers meet with, for instance? How was the decision arrived at? That record is due to us by March 31.

CMS could ask for 30 or 60 days more to gather everything up. And, we'd agree. We could ask them to come up with more documents, and when they're finally delivered we'd have 90 days to review them. We'd want to depose various key players in the decision-making process, and that would take some time, too.

Then what? The judge in the case could decide for CMS, for us, or issue a hybrid ruling giving both sides a little. As far as a clear cut victory for CMS, remember that the judge who'll decide the case, U.S. District Court Judge Royce C. Lamberth, granted the injunction. Lamberth found at the time there would be "irreparable harm" to community pharmacies and a likelihood of success on the merits of our lawsuit. On one count he said it was "crystal clear" that CMS had violated the law, the Deficit Reduction Act.  On CMS's AMP definition, he said it violated the plain language of the law and was "a wholesale rewrite" of what the Congress had mandated.

My guess is that eventually CMS will have to rewrite the rule, a process which could easily stretch into next year when there'll be a new President and Congress.

But there're only so many changes CMS can make by regulation. They won't be enough. NCPA will continue to use this reprieve to convince the current Congress of the need for structural improvements in the Medicaid reimbursement system that will not handicap community pharmacies by paying them substantially below their acquisition costs for generic drugs.

That means enactment of legislation like H.R.3140, H.R.3700, and S.1951 remains a top priority this year. We cannot let up now. We must make the most of this extra time we have been granted.

A new economic study, released by the Pennsylvania Association of Medical Suppliers indicates that the competitive bidding program for DME would result in reduced competition, lower quality of care, and higher costs.

Two Robert Morris University professors, Brian O'Roark, PhD and Stephen Foreman, PhD, conducted the study, which was released by the Pennsylvania Association of Medical Suppliers.

"The limits on competition that CMS is proposing to implement will have great potential to produce higher prices and lower service quality," Foreman said.  "The franchise bidding process that CMS is implementing is at odds with everything that we know about markets, efficiency and incentives.  We should be encouraging added competition in the market, not limiting it.  Limits on competition like those proposed by CMS rarely, if ever, make consumers better off."