DATE: April 12, 2005

SUBJECT: General Services Administration Acquisition Regulation (GSAR); Federal Agency Retail Pharmacy Program

SOURCE: Federal Register, March 29, 2005, Vol. 70, No. 69, page 19045

AGENCIES: Office of Governmentwide Policy, General Services Administration (GSA)

ACTION: Proposed Rule

SYNOPSIS: GSA is proposing to amend GSAR Part 538, Federal Supply Schedule Contracting, to add a new GSAR Subpart 538.XX, Federal Agency Retail Pharmacy Program, and a corresponding clause GSAR 552.238-XX, Federal Agency Retail Pharmacy Program Supply Schedule, to further implement Section 603 of the Veterans Health Care Act of 1992 (VHCA) (Public Law 102-585), which requires that certain the Department of Veterans Affairs (VA), the Department of Defense (DOD), the Public Health Service (including the Indian Health Service), and the Coast Guard, have access to federal pricing for pharmaceuticals purchased for their beneficiaries.

EDITOR'S NOTE: The GSAR is the shaded part of the GSA Acquisition Manual (GSAM), which is available on the Internet at http://www.acqnet.gov/GSAM/gsam.html.

DATES: Comments on the proposed rule should be submitted no later than June 13, 2005.

ADDRESSES: Respondents may submit comments directly on the Federal eRulemaking Portal at http://www.regulations.gov; on the web site at http://www.acqnet.gov/GSAM/gsamproposed.html; by e-mail to: gsarcase.2005-G501@gsa.gov; by fax to 202-501-4067; or by mail to General Services Administration, Regulatory Secretariat (VIR), 1800 F Street, NW, Room 4035, ATTN: Laurieann Duarte, Washington, DC 20405. Cite "GSAR Case 2005-G501" when making comments on this proposed rule.

FOR FURTHER INFORMATION CONTACT: Kimberly Marshall, 202-219-0986, or by e-mail at kimberly.marshall@gsa.gov.

SUPPLEMENTAL INFORMATION: The GSA Federal Supply Schedules (FSS) are long-term governmentwide contracts with commercial firms that provide over four million state-of-the-art, high-quality commercial services and products at volume discount pricing that can be ordered directly from FSS contractors or through the GSAAdvantage! online shopping (https://www.gsaadvantage.gov) and ordering system. The FSS also offer the potential for shorter lead-times, lower administrative costs, and reduced inventories.

GSA has delegated the responsibility for certain FSS to the VA, including Federal Supply Classification (FSC) Group 65, which includes pharmaceuticals and drugs. Federal agencies and certain other organizations are eligible to purchase pharmaceuticals and drugs from VA supply schedules. VA and DOD have requested that the GSAR be amended to add a clause unique to the virtual depot system established by a Federal Agency Retail Pharmacy Program utilizing contracted retail pharmacies as part of a centralized pharmaceutical commodity management program. At this time, only DOD has a program in place, and the clause would facilitate DOD's access to federal pricing offered on VA’s FSS pharmaceutical contracts for covered drugs purchased by DOD and dispensed to TRICARE beneficiaries through retail pharmacies in the TRICARE network. The TRICARE pharmacy website is at http://www.tricare.osd.mil/pharmacy/.

Under the proposed clause GSAR 552.238-XX, Federal Agency Retail Pharmacy Program Supply Schedule, the drugs for beneficiaries will be deemed to be ordered by the federal agencies through the FSS contract solely for the purposes of pricing, delivery, and scope of coverage, but such orders do not confer rights for any other purpose. The federal agencies will obtain refunds on covered drugs purchased through the retail pharmacy network by those agencies and dispensed to beneficiaries. The drug manufacturer will base the refund on the difference between a benchmark price, consisting of either the manufacturer's actual sales price to the wholesaler or retail pharmacy chain when known and auditable or non-federal average manufacturer price (non-FAMP) and the FSS price (the Federal Ceiling Price or FSS negotiated price, whichever is lower).

Proposed GSAR 552.2238-XX refers to a VA variation to GSAR 552.238-74, Industrial Funding Fee and Sales Reporting (JUL 2003)(Variation). This clause is available at http://www.va.gov/oamm/nac/fsss/.

This proposed rule would add GSAR Subpart 538.XX, which would consist of GSAR 538.XX01, Scope (which would describe the statutory basis for the Federal Agency Retail Pharmacy Program), and GSAR 538.XX02, Contract Clause (which would require that GSAR 552.238-XX be included “in solicitation and schedule contracts for Schedule 65, Part I, Section B, to apply only to orders for a Retail Pharmacy Program of the Department of Veterans Affairs, Department of Defense, Public Health Service (including the Indian Health Service), and the Coast Guard”.

Proposed GSAR 552.238-XX, would consist of the following paragraphs:

(a), which would describe the statutory basis for the Federal Agency Retail Pharmacy Program;
(b), which summarizes the purpose of the Federal Agency Retail Pharmacy Program;
(c), Ordering;
(d), Invoice Payments;
(e), Scope of Contract Worldwide;
(f), Delivery Prices;
(g), Electronic Commerce;
(h), Resolution of Refund Data Disagreements; and
(i), Industrial Funding Fee and Sales Reporting.

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953.

Copyright 2005 by Panoptic Enterprises. All Rights Reserved.

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