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Executive Summary

PMA TO MEET WITH NWDA OCT. 3 TO CLARIFY DEPOT STANCE and reassure wholesalers that PMA is not in favor of Medicaid's use of a depot system for government handling and distribution of prescription drugs. Pharmaceutical Manufacturers Association President Gerald Mossinghoff suggested the meeting in an Aug. 29 letter to National Wholesale Druggists' Association President Charles Trefrey. "We in our industry recognize and fully appreciate the vital job your members perform in the drug-distribution system -- and we continue to value their services and our relationship of mutual trust," Mossinghoff said. PMA's relationship with its allies in the drug trade is particularly important now, as the debate heats up over Medicaid drug price reduction plans. The drug manufacturers have found themselves on opposite sides of the fence with pharmacy over reimbursement levels under Medicaid plans. Mossinghoff's letter, responding to an Aug. 17 letter from Trefrey, discusses recent public statements by PMA on Medicaid's use of a depot system. Referring specifically to remarks he made at a July 10 press conference on Capitol Hill, Mossinghoff said: "I did not then, nor have I ever, suggested a [Veterans Affairs Department]-like depot distribution system to Congress." In its July 16 issue, "The Pink Sheet" quoted Mossinghoff as mentioning the possibility of a depot system for Medicaid in a report on the press conference (p. 3). NWDA wrote to PMA to ask for clarification on the association's position on the issue. Mossinghoff said that "The Pink Sheet" had misinterpreted his comments. "What I did say in a long answer to a long question at the press conference was that many proposals had been made for Medicaid, including the depot approach," Mossinghoff said. "But the very first thing I said in that answer was that Congress had decided to rely on the normal pharmacy distribution system for Medicaid." According to a transcript of his remarks provided in the letter, Mossinghoff said: "The decision in Medicaid is to rely on normal local pharmacy dispensing. That's been made and I assume it is probably a good idea." He added: "Now there could have been a decision made by Congress, by the Administration, to use a VA-type system, and to have government depots, where there would be [a] GS13 or a GS12 pharmacist who would dispense. In which case, there would probably be the same kind of situation that has grown up in the Veterans Administration." Mossinghoff continued: "As I indicated before, there is -- and I think [Senate Aging Committee] Chairman Pryor can take credit for it -- there is movement in the industry that four or five of our companies have indicated that they will give their very best price in the country to Medicaid. I think there may be other ways including centralized buying or the depot approach that might be appropriate. Obviously, we're looking at that, but it's not something to be done lightly."



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