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REP. LUKEN's BILL REQUIRING NON-PROFIT INSTITUTIONS TO REGISTER

Executive Summary

REP. LUKEN's BILL REQUIRING NON-PROFIT INSTITUTIONS TO REGISTER with FDA if they provide Rx drug services could be added to Rep. Dingell's drug diversion bill, NACDS President Bolger suggested in a speech Sept. 14 to the Southern Drug Store Association meeting in Rockport, Maine. Noting that both NACDS and NARD support the Luken bill, Bolger said that "we believe that it could be incorporated as an amendment" to the Dingell measure. A companion bill to the Dingell proposal is being sponsored in the Senate by Sen. Matsunaga (D-Hawaii). Bolger declared that the "Luken bill is the 'hammer' to the Dingell legislation that will make the law work by requiring non-profit hospitals that purchase drugs at preferential prices to register with the FDA and disclose information on how these facilities are using pharmaceutical products obtained at generous discounts from the manufacturers." Luken's bill now has 26 co-sponsors, Bolger noted. The bill was introduced March 21 ("The Pink Sheet" April 7, T&G-2). Commenting on NACDS activity in Medicaid Rx drug reimbursement issues, Bolger said that NACDS is urging HCFA to explore the use of advanced technology to improve the administration of the system. Reiterating the association's support of a voucher collection system, Bolger added that NACDS wants HCFA to go further and "look at electronic debit cards as a vehicle to reduce the costs of paying claims." Bolger declared that "such systems are working extremely well in the banking, transportation and communications industries as well as in private health care programs and with food stamps and welfare benefits. We believe that electronic debit cards will also work well for Medicaid and NACDS has estimated that such a system could save this health care program as much as $63 mil. if adopted." Bolger also briefly outlined NACDS's position on HCFA's proposal to modify the current maximum allowable cost (MAC) Rx reimbursement program. While the association would ideally favor a system "based upon a drug store's full, usual and customary charge," Bolger said that NACDS is supporting the CIP (Competitive Incentive Program) with modifications. He explained that under NACDS' proposal, for single source drugs, Medicaid would pay the usual and customary charge capped at the 90th percentile in each state. For multisource drugs, the payment would be 100% of the usual and customary charge if the drug dispensed is a generic, but only at the 75th percentile if the pharmacy dispenses a brandname product. HCFA's CIP proposal would discount the price of each prescription 5-10% if it is a generic and up to 25% if it is a single-source product. In addition, the agency plan allows for payment of a percentage (e.g., 125%) of the median price in a state for the most often prescribed drug products.

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