AMP: Unloved and Unwanted

Average Manufacturer Price (AMP) gained a new set of enemies. The three major manufacturer associations -- PhRMA, BIO, and GPhA – just submitted a joint letter asking CMS acting administrator Kerry Weems to delay implementation of the AMP Final Rule. (Source: FDANews. The letter has not been made public yet.)

It’s pretty clear to me why pharmacists hate this rule, hence their swift and universal condemnation for AMP shortly after the Final Rule was published. But manufacturers have their own reasons to dislike the rule. Here are three that come to mind:

• Compliance – Any new government rule will inevitably create implementation headaches, as the folks behind the Pharma Compliance Blog point out. The risk level went up last week when Weems highlighted compliance with regulations as a major priority.


• Reimbursement risks – As the AWP litigation slogs on, private payors will look to AMP as a new, credible benchmark for pharmacy reimbursement. See The ASP Future is Here for details on my prediction. It’s not clear what will happen when the product price (revenues to the manufacturer) gets unbundled from the costs of the distribution system (revenues to pharmacies, wholesalers, PBMs, and providers).


• Transparency – As currently implemented, AMP data will be made public for both brands and generics on a website at the 11-digit NDC level and updated monthly. Average Sales Price (ASP) data are already available for Medicare Part B drugs.

The Medicaid Commission’s September 2005 report helped to legitimize AMP as the debate over the Deficit Reduction Act was heating up. But does anyone still like AMP 24 months later? Even the U.S. Chamber of Commerce has jumped on the anti-AMP bandwagon!

Please post a comment (anonymously, if you choose) and tell me the pro-AMP story because I can’t locate any AMP fans outside CMS right now.