Frustrated in their efforts to have the federal government reconsider the anticipated implementation of a rule that is expected to slash Medicaid reimbursement rates to pharmacies, two trade associations are suing the government and mounting efforts to seek Congressional relief.
The groups - the National Association of Chain Drug Stores and the National Community Pharmacists Association - unveiled the two-pronged attack on Wednesday, and filed their suit in the U.S. District Court in Washington, D.C.
The suit names the Department of Health and Human Services, the Centers for Medicare & Medicaid Services, HHS Secretary Michael Leavitt and Kerry Weems, CMS' acting administrator, as defendants in the suit.
The legal action seeks to block implementation of a new federal rule known as the AMP rule, scheduled to go into effect this January. The groups contend that the rule aims to save $8 billion in payments to community pharmacies over five years, paying the pharmacies less for the drugs than it costs the pharmacies to acquire them.
The groups charge that rates paid to pharmacies already were expected to decline as a result of the Deficit Reduction Act of 2005. Language in the act requires reimbursement for generic drugs in the Medicaid program to be based on the average manufacturer price, or AMP. Those averages will be used to set maximum prices.
The pharmacy organizations say the AMP rule establishes an illegal method of calculating AMPs, which then establish an illegal method of calculating maximum reimbursements to pharmacies.
The groups said their protests were substantiated by a Government Accountability Office report that found that generic drug reimbursement would be an average of 36 percent less than a pharmacy's average acquisition cost for a sample of 77 drugs.
The suit seeks a preliminary injunction to stop the government from implementing the AMP rule until the courts can rule on the merits of the suit.
In addition, the groups are ramping up efforts to gain congressional support for three bills in Congress that would intervene to stop implementation of the rule.
"We and our members are redoubling our efforts to communicate the necessity of legislative action before year's end," said a joint letter from Bruce Roberts, executive vice president of the NCPA, and Steven Anderson, president and CEO of the NACDS.
"We must secure enactment of legislation to maintain for low-income patients access to and affordability of life-enhancing and life-saving medications," the letter continues. "No business should be expected to sell medications at 36 percent below cost, the situation that our members will face in January with regard to generic drugs."