Nominal price exemption reinstated — Any changes?
Nominal price exemption reinstated — Any changes?
College health centers and certain family planning clinics who looked to reduced pricing on contraceptives from manufacturers had to regroup when the 2005 federal Deficit Reduction Act (DRA) tightened eligibility for nominally priced drugs. The result? Increased costs drove up the price of brand-name contraceptives on some college campuses from about $5 to $40-$50 a month.1
Now that March 2009 federal legislation has restored the conditions enabling companies to offer deeply discounted contraception, will facilities once again be able to offer low-cost contraceptives?
About 25% (200) Planned Parenthood Federation of America (PPFA) health centers were affected by the 2005 DRA, says Tait Sye, PPFA spokesperson. Since the legislation was passed in March, PPFA has worked with representatives from the Department of Health and Human Services and pharmaceutical companies to continue access to affordable birth control, Sye states.
Member facilities of the American College Health Association (ACHA) were especially impacted when the 2005 legislation went into effect. While the legal barrier to reinstating the nominal pricing has been removed, ACHA notes that it is up to the discretion of the manufacturers to reinstate such pricing with college and university health centers. Mary Hoban, PhD, CHES, staff liaison for the association, says, "We have encouraged members to talk with pharmaceutical representatives." The manufacturers are waiting for the Centers for Medicare & Medicaid Services (CMS), which will oversee the final implementation of the legislation, she says. "We've removed the legal barrier."
With the legislative correction in hand, shouldn't lower prices be automatically reinstated? Not exactly. A review of the nominal pricing structure might offer insight.
As a condition of participating in Medicaid, Congress created the 340B drug pricing program to require drug manufacturers to provide outpatient drugs at a ceiling discounted price to certain eligible "covered entities," such as Title X clinics and community health centers. Manufacturers also were provided an incentive to provide "nominally priced" discount drugs to noncovered charitable organizations and clinics by exempting them from the Medicaid rebate program to states.2
The 2009 bill allows new groups of health service providers to purchase drugs at "nominal prices" under the Medicaid drug rebate statute. The nominal price of a drug is defined as less than 10% of the average manufacturer price, and is not included in the government's "best price" calculations used to determine the price available to Medicaid and the 340B program.3
While the 2009 law makes it reasonably clear that family planning and college clinics that offer family planning services are covered, the law might open the exemption to entities that provide the same type of services to the same type of populations as 340B-covered providers. CMS will need to issue guidance before drug manufacturers can begin extending nominal pricing.3 If manufacturers begin to issue nominal pricing before exempted groups are identified, they might be opening themselves to pricing liabilities.3
About 400 family planning and community health centers, which serve more than 3 million college students and 500,000 low-income women, were affected by the DRA language.2 Planned Parenthood began a nationwide grass-roots campaign in 2007 to restore affordable birth control. Affiliates worked with young people on college campuses to reach out to members of Congress through letters, telephone calls, and visits to Capitol Hill in an effort to raise awareness for the cause.
In an issued statement, Cecile Richards, president of Planned Parenthood Federation of America, said, "We applaud Congress for righting a wrong that has restricted access to basic but critical preventive health care services and left millions of women at risk of unintended pregnancy. The passing of [this] legislation is a victory for women's health and especially for women who have struggled to afford the rising costs of basic contraception in these tough economic times."4
References
- Progress on family planning. The New York Times, March 14, 2009. Accessed at www.nytimes.com.
- The National Campaign to Prevent Teen and Unplanned Pregnancy. Policy Brief: Restoring Affordable Birth Control. Accessed at www.thenationalcampaign.org.
- Rives K. A win for family planning and college clinics. Drug Discount Monitor 2009; 6:3, 10.
- Planned Parenthood Federation of America. Planned Parenthood Federation of America applauds passage of legislation providing increased access to affordable contraceptives to prevent unintended pregnancies. Press release. March 10, 2009. Accessed at www.plannedparenthood.org.
Subscribe Now for Access
You have reached your article limit for the month. We hope you found our articles both enjoyable and insightful. For information on new subscriptions, product trials, alternative billing arrangements or group and site discounts please call 800-688-2421. We look forward to having you as a long-term member of the Relias Media community.