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10/19/2017 08:06 PM
Pennsylvania State Senate
http://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=S&SPick=20170&cosponId=23980
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Senate of Pennsylvania
Session of 2017 - 2018 Regular Session

MEMORANDUM

Posted: May 24, 2017 10:01 AM
From: Senator Thomas H. Killion
To: All Senate members
Subject: Drug Dispensing Fee Legislation
 
In the near future, I plan to introduce legislation that will establish a $10.49 professional dispensing fee in the Medicaid program while reimbursing pharmacies for ingredient cost based on the National Average Drug Acquisition Cost (NADAC).

In 2016, the Center for Medicaid and Medicare Services (CMS) published its Final Outpatient Drug Rule requiring states to migrate to a more transparent ingredient cost reimbursement methodology and pay pharmacies a professional dispensing fee that reflects the true cost to dispense medications. The Pennsylvania Department of Human Services (DHS) had numerous avenues for complying with this rule and decided to conduct its own Cost of Dispensing Study.

DHS withheld its findings for months after its completion. Their proposal includes adopting an ingredient cost payment methodology based on NADAC while paying pharmacies a $7 professional dispensing fee – the lowest of any state that has moved forward with its plans to comply with the CMS rule.

The DHS study and proposal drastically understate the actual cost pharmacies incur in dispensing medications - going so far as to include $0 in certain overhead categories required. Moreover, when NADAC is used as a payment methodology, professional dispensing fees are the only way a pharmacy can cover all of the costs and services necessary to dispense prescription medications.

Community pharmacies provide vital care to Medicaid patients throughout Pennsylvania and the current DHS proposal would force pharmacies to provide such care well below their costs.

My legislation will help to mitigate this error by aligning Pennsylvania’s professional dispensing fee with surrounding states such as West Virginia, Ohio, and Maryland. It is, however, important to acknowledge that many other states such as New York, New Jersey, and Virginia have even higher dispensing fees.

Please join me by co-sponsoring this crucial legislation. Thank you for your interest and support.


Introduced as SB797