A famous philosopher once opined: "The future's not set. There's no fate but what we make for ourselves."
The pharmacy lobby looks set to prove this aphorism true by preventing the use and/or publication of cost-plus Average Manufacturer Price (AMP) based reimbursement for generic drugs under Medicaid. Looking at two new pieces of evidence, I expect another legislative delay that will postpone implementation until at least late 2010 – and possibly repeal AMP altogether. Hasta la vista, AMP!
The latest evidence that judgment day will be postponed comes from the Senate Finance Committee. On page 27 of the recently released Expanding Health Care Coverage: Proposals to Provide Affordable Coverage to All Americans, the Committee proposes increasing the Federal Upper Limit (FUL) percentage for pharmacy reimbursement from 250% to 300% of AMP for generic drugs, which are technically referred to as "pharmaceutically and therapeutically equivalent multiple source drugs available nationally through commercial pharmacies." The document also proposes other unspecified "clarifications" and "modifications."
Here's another piece of evidence – it looks like CMS is not even planning for AMP implementation in FY2010. The Deficit Reduction Act of 2005 appropriated $5 million dollars for each of fiscal years 2006 through 2010 to carry out a survey of retail drug prices. If I am reading the budget document correctly (not sure), then the FY2010 budget for the Department of Health and Human Services (HHS) does not appear to be including the survey in HHS outlays. See the item labeled "Appropriation (Federal upper payment Limit for multiple source drugs)" (page 474).
The pharmacy industry continues to use its lobbying power, a trend that I have been following on Drug Channels for over two years. (See 2007 Trends: Lobbying for Pharmacy Profits from way back in January 2007.)
So here's some free advice – worth twice what you're paying.
If the pharmacy associations really want to get serious, they should send a cyborg back in time to terminate the AMP section from the Deficit Reduction Act of 2005, thereby avoiding this whole situation. Simple, really.
I didn't get a chance to see T4 this weekend, but Terminator fans will get a chuckle from 5 Reasons The Terminator Franchise Makes No Sense. (Warning: The link contains profanity, sci-fi nerdiness, and excessive snark.)