Wednesday, August 4, 2010

Who Put the PhRMA Earmark in the FMAP Bill…?

The education and Medicaid legislation the Senate will be voting on this morning includes a provision that changes Medicaid reimbursement of certain drugs.  The provision had previously been included in “extenders” legislation that the Senate voted on back in June.  However, the language being voted on this morning contains an additional word that was not included in the previous version – “generally:”

Effective as if included in the enactment of Public Law 111-148, section 1927(k)(1)(B)(i)(IV) of the Social Security Act (42 U.S.C. 1396r-8(k)(1)(B)(i)(IV)), as amended by section 2503(a)(2)(B) of Public Law 111-148 and section 1101(c)(2) of Public Law 111-152, is amended by adding at the end the following: ‘‘, unless the drug is an inhalation, infusion, or injectable drug that is not GENERALLY dispensed through a retail community pharmacy; and’’.

That one word gives the Centers for Medicare and Medicaid Services (CMS) flexibility in determining what drugs are generally not dispensed through a retail pharmacy – and that discretion given to CMS means that certain pharmaceutical companies will not have to provide reimbursement rebates to Medicaid.  The Congressional Budget Office found that this one-word change would result in nearly $100 million less in rebates being collected from the pharmaceutical industry (see the $2.1 billion in savings for Section 526 of Senate amendment 4386 offered in June when compared to $2.0 billion in savings for Section 202 of Senate amendment 4575, which we’ll be voting on this morning).  So it’s worth asking:

  • Which drugs, and which companies, will benefit from this $100 million change?
  • Who decided to give the pharmaceutical industry this $100 million earmark, and how did it end up in the legislation?
  • Is this yet another one of Democrats’ infamous backroom deals?  When will the majority finally open legislative agenda to full scrutiny, amendments, and public transparency?