WASHINGTON--Trade organizations representing chain drug stores and community pharmacists have brought suit against CMS to block more than $8 billion in Medicaid drug reimbursement cuts scheduled over the next five years.
In their lawsuit, filed Nov. 7 in the U.S. District Court for the District of Columbia, the National Association of Chain Drug Stores and the National Community Pharmacists Association argue that CMS' final AMP (average manufacturer price) rule, published in the Federal Register in July, violates the Social Security Act and will result in the closure of thousands of pharmacies nationwide. (See HomeCare Monday, July 16.)
The groups said that the AMP rule, set to take effect in January, contradicts the language of the Social Security Act by inappropriately including dozens of prescription transactions that do not fit within the rule's definition, such as sales to patients and physicians. The rule will result in reimbursement for Medicaid generic drugs at a rate 36 percent below those drugs' acquisition costs, the groups said.
"We're being asked to lose money on almost every generic we dispense," Charles Sewell, NCPA's senior vice president of government affairs, told reporters in July. Sewell estimated that 2,300 NCPA members could be forced to close their doors if the rule is implemented.
In a joint letter to Congress about the lawsuit, the trade groups--which represent 62,000 community pharmacies--called implementation of the rule "an impending crisis ...We cannot risk the potential that patients will not receive the medications they need, as this creates unacceptable human costs and higher health care costs in the form of emergency room visits and other catastrophic care."
The lawsuit asks for a court order declaring the AMP rule illegal, as well as for permanent relief against its implementation and against the posting of AMP data based on the rule.