The CMS has issued a final rule that refigures the Medicaid drug-pricing formula, makes the pricing more transparent and requires states to collect specific data from physicians about the drugs they administer in their offices.
Overall, the CMS said that the new rule, which was mandated by federal law, would help the Medicaid program and states save $8.4 billion over the next five years by paying more appropriately for prescription medications. Still, Medicaid expects to spend $140 billion for drugs over fiscal years 2007 through 2011.
In 2004, the Government Accountability Office and the HHS Office of Inspector General found that Medicaid payments to pharmacies for generic drugs were much higher than what pharmacies were actually paying for those drugs, the CMS said.
This new calculation method will allow Medicaid to pay more accurately for the medicines enrollees need, CMS Acting Administrator Leslie Norwalk said in a written statement.
But the National Community Pharmacists Association said the regulation does not reflect actual pharmacy drug acquisition costs and said it would try to prevent its implementation.
If the current policy is fully implemented, community pharmacies will be forced to make the impossible choice of turning their backs on vulnerable patients by dropping out of the Medicaid program or continuing in a program that threatens to bankrupt their businesses, said Bruce Roberts, executive vice president and chief executive officer of the NCPA, in a written statement. -- by Matthew DoBias