NCPA disputes PCMA claim about managed Medicaid savings

June 28, 2011

Local pharmacists can reduce Medicaid costs by helping millions of patients take their medication properly, said B. Douglas Hoey, RPh, MBA, in a prepared statement of response to a recent ad campaign sponsored by the Pharmaceutical Care Management Association.

Local pharmacists can reduce Medicaid costs by helping millions of patients take their medication properly, said B. Douglas Hoey, RPh, MBA, executive vice president and CEO, National Community Pharmacists Association (NCPA), in a prepared statement of response to a recent ad campaign sponsored by the Pharmaceutical Care Management Association (PCMA).

PCMA’s ad campaign argues that Medicaid pharmacy could save $33 billion over the next 10 years by transitioning from state Medicaid fee-for-service (FFS) programs to use of independent, third-party pharmacy benefit experts. Based on research commissioned by PCMA and conducted by The Lewin Group, the organization believes that modernizing the pharmacy benefit model would save billions without cutting benefits or payments to doctors and hospitals.

In response, citing research from Georgetown University that looked at a Medicaid managed care pilot program in Florida, Hoey said that for-profit managed care programs appear to significantly disrupt patients and quality of care without providing any clear cost savings. He also cited a report released recently by The Common Wealth Fund stating that for-profit, publicly traded managed care companies charge states and taxpayers more for administrative costs than do alternative models such as non-publicly traded plans owned by groups of healthcare providers, health systems, community health centers, or clinics.

“Local pharmacists provide expert medication counseling, which can help reduce the estimated $290 billion spent annually on improper prescription drug use. In addition, community pharmacists are a leading provider of low-cost generic drugs and consistently dispense them more often than PBM-owned mail-order pharmacies,” Hoey said. He added that according to IMS Health, Medicaid costs could be reduced by $1 billion for every 2% increase in generic use. Hoey said that the Massachusetts fee-for-service Medicaid program has a generic dispensing rate of 79.3%. If that rate were achieved nationally, it would save $5.14 billion.

"Patients and policymakers should continue to work with trusted, highly trained community pharmacists to improve health and lower costs, and think twice about out-of-state, corporate entities that may quite simply be in it for the money," Hoey said.