Proposed Rule to Implement Provisions of DRA Pertaining to Prescription Drugs under the Medicaid Program; Docket No. CMS-2238-P

The Food Marketing Institute (FMI) appreciates the opportunity to comment on the Centers for Medicare and Medicaid Services (CMS) proposed rule to implement provisions of the Deficit Reduction Act (DRA) related to prescription drugs reimbursed under the Medicaid program. 71 Fed. Reg. 77174 (Dec. 22, 2006). FMI is highly concerned about the impact of the proposed rule on its supermarket pharmacy members. As CMS notes in the proposed rule, the use of Average Manufacturer Price (AMP) as a benchmark for pharmacy reimbursement represents a departure from the previous role of AMP in the Medicaid rebate calculation. Understanding the difficulties that the agency faces in reconciling these conflicting roles for AMP, we believe that several of the decisions CMS has proposed would unduly reduce AMP. Our comments and recommendations are discussed more fully below and in the attached Appendix A, which translates our comments into regulatory language for your consideration.