HDMA APPLAUDS INTRODUCTION OF H.R. 1392, LEGISLATION TO CORRECT THE TREATMENT OF PROMPT PAY DISCOUNTS UNDER THE MEDICARE PART B AVERAGE SALES PRICE REIMBURSEMENT METRIC

Arlington, VA – March 13, 2009 –The Healthcare Distribution Management Association (HDMA) commends Representatives Gene Green (D-TX)  and Ed Whitfield (R-KY) for introducing bipartisan legislation (H.R. 1392) to correct the Average Sales Price (ASP) payment methodology used by Medicare to determine reimbursement for Part B drugs and biologics.  This critical legislation clarifies how to treat prompt pay discounts paid to distributors when calculating ASP. By clarifying that prompt pay discounts paid to distributors are not to be included in the manufacturer’s ASP calculation, Medicare Part B reimbursement rates for drugs and biologics will more accurately reflect the acquisition price available to physicians and hospital outpatient clinics.  This also will bring consistency to federal programs by aligning the treatment of prompt pay discounts in Medicare Part B with the treatment of Medicaid Average Manufacturer Price (AMP) methodology.    

"It is clear Congress intended for Part B reimbursement to more closely reflect product acquisition costs in the marketplace when it established the ASP metric under the 2003 Medicare Modernization Act (MMA),” said Scott Melville, HDMA Senior Vice President of Government Affairs. “This legislation will correct a clear shortcoming in the formula that has inappropriately reduced Part B reimbursement for physicians and outpatient hospital clinics.  HDMA and its members support this bipartisan legislation and we pledge to work for its enactment this year.”

About HDMA
The Healthcare Distribution Management Association (HDMA) is the national association representing primary, full-service healthcare distributors. Each business day, the member companies of HDMA are responsible for ensuring that more than eight million prescription medicines and healthcare products are safely delivered to 145,000 pharmacies, hospitals, nursing homes, physician offices, clinics, government and other providers in all 50 states. This essential public health function is provided with tremendous efficiency, saving the nation’s healthcare system nearly $32 billion each year. HDMA and its members are the vital link in the healthcare system, working daily to provide value, remove costs and develop innovative solutions to deliver care safely and effectively.