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Executive Summary

The Michigan Pharmacists Association (MPA) is urging the Health Care Financing Administration (HCFA) to allow for a state-by-state approach to expanding the MAC program as an alternative to the federal programs proposed in the Aug. 19 Federal Register ("The Pink Sheet" Aug. 25, p.3). MPA is proposing that HCFA update on a quarterly basis and send to state Medicaid agencies a "MAC drug list" of products that meet specified standards for generic equivalency. Sources for the list, the association recommends, could be the American Pharmaceutical Association/Academy of Pharmaceutical Sciences and MPA's own Pharmacy & Therapeutics Council. According to an MPA position paper, "the state Medicaid agencies would utilize their appropriate medical pharmacy liaison committee to establish a MAC payment screen level (price per unit) for each drug product specified on the MAC listing." This function, MPA adds, would have to be performed within 30 days of receipt of the new drug list. This list would then be published and sent to all participating pharmacies. Minimum reimbursement for MAC-listed generic products would be set at a level of the state's pharmacy dispensing fee plus 50% of the difference between the actual acquisition cost of the innovator brand name drug in the most commonly purchased package size and the state's designated MAC price. This formula differs from Michigan's current state MAC program. The Michigan mini-MAC currently pays pharmacists $3.25 plus actual acquisition cost and carries no generic incentive provision. According to the MPA position paper, their program, called the Community Incentive Program, "mimics the current 'MAC' program but . . . involves greater participation by the private sector in a partnership with HCFA." The MPA position statement also proposes a state-based mechanism for drug utilization and peer review. State Medicaid agencies would provide the drug utilization programs. Peer review councils set up by a national and state pharmacy association coalition would monitor the system. The state pharmacy association maintains that its "Community Incentive Program" provides "a definite incentive for obtaining a lower drug product cost; magnifies the advantages of the current MAC program; guarantees that savings will be obtained from the dispensing of lower cost therapeutically-equivalent drugs; and provides for a mechanism of drug utilization and peer review."

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