Pharmacy Reimbursement Bill Stalls in Congress

Published December 1, 2007

Community pharmacy owners nationwide watched with concern this autumn as U.S. House Energy & Commerce Committee Chairman John Dingell (D-MI) delayed scheduling hearings for federal legislation that may make or break their businesses’ future.

Unless Congress intervenes before January, a new federal rule will take effect reducing Medicaid’s Average Manufacturers Price (AMP) generic drug reimbursements by 36 percent, leaving pharmacies to fill the gap between federal funds and the cost of generic products.

The Saving Our Community Pharmacies Act of 2007 (H.R. 3140) would amend the Social Security Act by setting pharmacy reimbursement based on retail prices rather than the average manufacturer’s price.

Rep. Nancy Boyda (D-KS), who lobbied the Centers for Medicare and Medicaid Services (CMS) this summer to delay the new AMP regulations from taking effect until after legislative deliberation, wasn’t flustered by Dingell’s inaction heading into mid-October.

“Rep. Boyda is confident we’ll soon get a hearing on H.R. 3140,” said her press secretary, Thomas Seay. “We continue to add co-sponsors and push the legislation.”

Needing Changes

Boyda dismissed persistent rumors of the bill’s demise, pointing out the increased number of co-sponsors from 30 in September to 108 at press time.

Concerns about the legislation’s prospects stem from congressional “mandatory spending” budget rules, which require any spending increases to be offset by program cuts or tax increases. Budget estimates are that $3.5 billion will be needed to reimburse pharmacies fully for their costs of purchasing and distributing generic drugs for Medicaid patients.

Instead of considering the impending regulation changes, the House Energy & Commerce Committee focused on a $35 billion State Children’s Health Insurance Program (SCHIP)/Medicaid expansion and a $20 billion subsidy to prevent Medicare physician pay cuts.

“Community pharmacies are very concerned about this reimbursement adjustment scheduled for January 2008,” said Bill Patton, spokesman for the Illinois Association of Pharmacists. “We will see neighborhood pharmacies close if a change isn’t made.”

Saving Money

A financial crisis among Illinois pharmacies was mounting at press time, as the state’s Medicaid reimbursements were averaging more than 90 days overdue. Having the federal government reduce its reimbursements to pharmacists will aggravate the financial troubles of many of the state’s already-struggling community drug stores, Patton said.

If businesses are forced to bear the financial burden, Patton said, many would be forced to close, restricting patients’ access to needed prescription drugs.

According to the National Community Pharmacist Association, a trade group based in Virginia, “patients depend on their trusted community pharmacy to provide timely access to prescription drugs. This access helps patients maintain their medication regimen and take their medicines properly, thereby promoting patient health and saving health care dollars.”

Fran Eaton ([email protected]) writes from Illinois.

For more information …

Saving Our Community Pharmacies Act of 2007: