Issue 3 - the Montana Secretary of State Website

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RESPONSE #1: The department agrees it is important to maintain adequate
reimbursement for dispensing generic drugs to maintain Montana Medicaid
recipient's access to pharmaceuticals and to contain costs. The department
disagrees that increasing the dispensing fee is necessary to adequately reimburse
pharmacies for dispensing generic drugs. Montana Medicaid's utilization rate for
generics is 72.61% and its generic substitution rate is 95.52%. Montana Medicaid's
current maximum dispensing fee of $5.04 is one of the highest in the state for third
party payors and one of the highest in the nation for state Medicaid programs.
Implementing the SMAC stated in these rules is consistent with the federal
requirements to reimburse pharmacies at estimated acquisition costs and eliminate
overpayments allowed by the current reimbursement methodology.
COMMENT #2: It was suggested that the definition of multisource drug be a drug
that has three or more "A" rated therapeutically equivalent drug products sold by
different manufacturers that are readily available for purchase nationally and in
Montana. Any other definition risks basing drug product reimbursement on an
unstable pricing structure, which could reduce access to generic drugs for Medicaid
recipients.
RESPONSE #2: The department disagrees that the definition of multisource drugs
should be changed. The existing definition does not result in an unstable pricing
structure. The department has addressed generic availability in its mandatory
generic policy. Generic mandatory logic typically does not engage until there are
two or more "A" rated therapeutically equivalent drug products in addition to the
trademarked product in the marketplace. The first generics may be available at a
significantly discounted rate to pharmacies. The rule allows the department to
actively monitor the Montana marketplace to calculate the Medicaid reimbursement
that approximates actual acquisition cost as required by federal law.
COMMENT #3: It was proposed that SMAC be calculated using drug price
information obtained from multiple nationally recognized data sources because
pharmacies are not appropriate sources of information for determining actual
acquisition cost for setting a price based on SMAC. The commentor suggests that
the department use nationally recognized data sources.
RESPONSE #3: The department plans to use a variety of sources to arrive at an
equitable price for generics but the actual cost of a drug to a Montana pharmacy is
the best source of data. Pharmacy level data is a more appropriate source for
determining acquisition costs to set a price based on SMAC than national data
sources. The survey of in-state pharmacy providers is the most accurate means of
determining a Montana pharmacy's actual acquisition cost and the availability of a
product across Montana.
The department's survey process is designed to be minimally disruptive to pharmacy
operations. The commentor's proposal to use only nationally available pricing
information would not provide Montana-specific acquisition cost or availability.
Montana Administrative Register 3-2/11/10