NCPA Testifies Before House Small Business Committee
ALEXANDRIA, Va., Dec. 6 /PRNewswire-USNewswire/ -- Charles
Sewell, National Community Pharmacists Association (NCPA) senior
vice president, Government Affairs, testified today before the U.S.
House Small Business Committee. The hearing focused on
strengthening the Regulatory Flexibility Act (RFA), which requires
government agencies to examine and report on the impact of new
regulations upon small businesses when they issue proposed rules.
Sewell supported the need for a legislative fix after witnessing
the Centers for Medicare & Medicaid Services' (CMS) failure to
explore the ramifications its Medicaid generic prescription drug
reimbursement regulations will have on the 23,000 small business
independent pharmacies that NCPA represents.
"CMS' half-hearted attempt to follow the Regulatory Flexibility
Act is going to spawn a financial crisis for independent pharmacies
and a health crisis for their patients," said Sewell. "Simply put,
CMS was derelict in its duty by not conducting a thorough economic
study of its proposed or final regulations for Medicaid generic
drug reimbursement. Putting more teeth into this law will ensure
small businesses are not an afterthought when creating
CMS' Medicaid generic drug reimbursement regulation is based on
its Average Manufacturer Price (AMP) definition that does not
accurately reflect retail acquisition costs. In fact, a Government
Accountability Office (GAO) study determined that independent
pharmacies would average reimbursements 36 percent below their cost
under CMS' regulation. CMS did not conduct a similar
CMS will fully implement its AMP rule on January 30, 2008. At
that time independent pharmacies, which are often located in
underserved rural and urban communities, will be forced to make the
business decision to either limit or drop out of Medicaid, or even
go out of business. Their patients, with their access to
prescription drug services curtailed, will have to explore other,
more expensive health care options such as emergency room
NCPA is pursuing a variety of legal and legislative remedies to
delay or change CMS' AMP regulation. In Sewell's testimony he
offered several recommendations for how the RFA could be improved
in the future for other small businesses.
"An agency should not issue a final regulation unless it
specifically analyzes the significant impact that rule will have on
small businesses," said Sewell. "Agencies would no longer be able
to hide behind the excuse of having a lack of evidence. In order to
proceed, they would have to find that there is no adverse impact.
If studies exist showing the rule will significantly impact small
businesses (defined as a loss of 3 percent or more of gross
revenue), the agency cannot simply dismiss them and proceed with
implementation, nor can the agency act if it has not found any
relevant data. Finally, a mechanism would be in place for a person
or entity to issue a regulatory challenge of any agency that
releases a final rule that it believes violate the RFA."
If all of these recommendations are adopted, it is unlikely the
situation currently jeopardizing patient access and confronting
community pharmacies would have transpired.
To view Sewell's entire testimony go here: http://www.ncpanet.org/pdf/leg/amp_sba_committee_testimony.pdf
The National Community Pharmacists Association, founded in 1898,
represents the nation's community pharmacists, including the owners
of more than 23,000 pharmacies. The nation's independent
pharmacies, independent pharmacy franchises, and independent chains
dispense nearly half of the nation's retail prescription medicines.
For more information go to www.ncpanet.org.
Source: National Community Pharmacists Association
CONTACT: John Norton of the National Community Pharmacists
Web Site: http://www.ncpanet.org/
Posted: December 2007