Monday, September 26, 2016

MDRP Pre-conference Day - Recap on the AMP Final Rule

A recap from the MDRP pre-conference Day on the AMP Final Rule by John Bliss, an independent government pricing consultant.

I spent most of the day in Symposia C. The focus was on the ”AMP rule: Application, Implementation and Impact of the Final Rule.” The first session was a panel of manufacturer representatives, and the rest of the sessions were led by members of various legal and consulting firms.

The panel discussed the various components of the final rule, and pointed out that 2016-2017 will be a transitional year. It will be critical to provide and archive a record of all the activities surrounding the actions taken to implement the final rule, including legal sources, consulting recommendations, policies and procedures, and contract changes. The goal is to also steer documentation into “non-privledged” files, to prevent complications if audited in the future.

Topics addressed by the panel were:

  • Retail Community Pharmacies (RCP) and Specialty Pharmacies
  • Oral Dosage Forms
  • Specialty Pharmacies Class of Trade Issues
  • 5I Drugs
  • Line Extensions
  • Best Price – Offered or Achieved?
  • Authorized Generics – who is doing the repackaging?

The rest of the day was spent digging into these topics, and others (Bundles and BFSF).


Retail Community Pharmacies (RCP)

• Do not set up Specialty Pharmacy Class of Trade (COT) – not defined in rule
• If set up, set up two…mail and non-mail
• Learn the customer – pick up the phone

Oral Dosage Forms:

May need to go to the “Ship To” level

5i Drugs

• CMS does not understand them - may need to write it up and present it to CMS
• 70/30 ratio may be difficult to ascertain - evaluate status monthly
• Need created by NACDS lawsuit to limit AMP to RCP activities
• Not generally distributed through RCP
• Filter by Class of Trade (COT) only
• Restatements not requires

Line Extensions

• Waiting for CMS to finalize rule
• “We are clarifying” – scary words
• Congress wanted to captue dollars based on original base AMP
• Anti Dependency Formula disqualifies line extension status

Bundled Sales

• Bundles are pricing conditions based on products and performance
• Plenty of ambiguity within the definitions
• Communication critical among GP, Legal and Contracting

Bona Fide Service Fees

• Conceptually difficult

  • Bona Fide = Ignore, not included in AMP
  • Non Bona Fide = Include in AMP = reduce AMP

• Avoid putting legal definitions in contracts
• Look forward – involved Contracting personnel
• Critical – must have 4-part testing set up
• Review existing, catalog itemized services


The main take away for all of these sessions is clear. Make the assumptions when required, and Document, Document, Document.

About the author:

John Bliss is a contributing writer for the Medicaid Drug Rebate Program Summit. He has extensive experience in the pharmaceutical industry, including AstraZeneca, Sanofi Aventis, Merck, Pfizer, Daiichi Sankyo, and Bristol-Myers Squibb (BMS). The bulk of John’s career was at BMS. When OBRA90 hit, Government Pricing took over his life. Government pricing, managed care contracting, rebates, and chargebacks continue to extend challenges and provide meaningful employment. John now works as a consultant, primarily subcontracted by other consulting firms, providing value added services to each of them and their clients.

Read more on this topic and about MDRP 2016 here:

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