What is in this article?:
- Generic Pileup: New Releases, Medicaid Changes on Collision Course
- New Generic Entries
- Calculating FULs
- Yet Another Reimbursement Metric: AAC
“Hundreds of supermarket pharmacies offer reduced-price generic drug programs. Some chains have free generic drug programs for low-income consumers. These programs save consumers significant amounts of money and allow uninsured and underinsured individuals and patients on fixed incomes access to vital, generic drugs."
— Cathy Polley, VP, health and wellness, FMI
Yet Another Reimbursement Metric: AAC
Getting to the true pharmacy drug acquisition cost is not an easy task when it comes to third-party reimbursements for generic drugs.
States for over a decade have used the average wholesale price (AWP), a price published by drug manufacturers, to determine reimbursements to retail pharmacies. However, AWP is thought to be faulty and not reflective of the true acquisition cost.
In an effort to cut costs on reimbursements on Medicaid, Alabama and Oregon have turned to average acquisition cost (AAC) in determining their Medicaid reimbursements. AAC is a benchmark said to more accurately reflect the cost of generic drugs to retail pharmacies. Under this method, states request invoice data from pharmacies to calculate the AAC.
However, this measure, which is now under consideration by the Centers for Medicare and Medicaid Services (CMS), is being questioned by independent retail pharmacists who claim they pay higher prices than large retail chains and that the average cost means independents will be reimbursed at a lower price than they pay for the drugs.
“The devil you know is better than the devil you don’t,” John Coster, government affairs director for the National Community Pharmacists Association, told Stateline, a news service of the Pew Center on the States, that reports on state policy.
“We have grave concerns about [Alabama’s] average acquisition cost model and how it’s determined.”