Tuesday, July 23, 2013

Surprise! CMS Dumps National Average Retail Price (NARP) Survey

The Duchess of Cambridge wasn't the only one delivering a surprise yesterday. In an unexpected announcement, the Center for Medicare and Medicaid Services (CMS) announced it will immediately terminate the National Average Retail Price (NARP) survey. (Read the CMS statement below.)

CMS didn’t give a reason, but I presume it’s a sequester-related budget cut. Wise fiscal planning, or another implementation failure for Obamacare?

Despite the move, I don’t think CMS will back away from the more-controversial (and less accurate) National Average Drug Acquisition Cost (NADAC) survey.

Here’s the statement popped up on CMS’s Survey of Retail Prices page.
Effective July 1, 2013, CMS has suspended Part I of the nationwide retail survey for collecting information about consumer purchase prices, pending funding decisions. Therefore, the resulting draft NARP file will not be published on Medicaid.gov at this time; however, archive files will remain on the website.
In case you forgot, the NARP data provide average prescription revenues for more than 4,000 of the most commonly dispensed brand and generic outpatient drugs, listed by an 11-digit National Drug Code (NDC). The NARP prescription revenue data include: (1) the amounts paid for drug ingredient costs, (2) customer copayments or coinsurance, and (3) dispensing fees. These monthly data were reportedly based on 50 million nationwide retail pharmacy claims, gathered from independent data suppliers.

Since NARP simply summarized revenue per prescription, it was fairly non-controversial.

By contrast, Average Manufacturer Price (AMP) and NADAC remain under constant attack from the pharmacy industry’s lobbyists.

For a sample of the pharmacy industry’s latest AMP/FUL criticism, see this July 12, 2013, letter from NACDS and NCPA to CMS. While some of their critiques are reasonable, there is a healthy dose of self-interest in the pharmacy industry’s powerful dislike of transparency to acquisition costs.

AMP will be used to compute the Federal Upper Limit (FUL), which caps Medicaid reimbursement. The FUL data are still in draft form, so they are not yet being used for reimbursement. CMS apparently plans to issue its final AMP rule in August 2013, which will trigger application of the new rates later in 2013 or at the start of 2014. For more background, see AMP Final Rule is Coming … in August.

Regular regulars know that I expect acquisition-cost to emerge as the winning benchmark for pharmacy reimbursement. NADAC is the foundation for this effort, so I will be very surprised if CMS backs off. For background and a recent update, see NADAC Momentum: California Abandons Average Acquisition Cost for Pharmacy Reimbursement.

Then again, the current administration likes to leave us guessing about many things. Stay tuned.

P.S. My wife has £10 on George, which is the 5-2 favorite according to SkyBet this morning. #royalbaby. Unfortunately, SkyBet has not yet published odds on NADAC.

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