Pharmacy groups reach out to states facing Medicaid budget challenges

February 22, 2011

Mindful of the push to balance state budgets, the NACDS and the NCPA offered to work closely with states to cut costs without endangering Medicaid beneficiaries' access to pharmacy prescription drug services.

Mindful of the push to balance state budgets, the National Association of Chain Drug Stores (NACDS) and the National Community Pharmacists Association (NCPA) offered to work closely with states to cut costs without endangering Medicaid beneficiaries' access to pharmacy prescription drug services.

In a joint letter to every governor and state Medicaid director, NACDS and NCPA outlined the importance of pharmacies to the Medicaid program and offered a series of recommendations to help states meet their budgetary goals.

"Community pharmacies play a vital role in the Medicaid program as the backbone of its drug benefit," wrote NACDS President and CEO Steven C. Anderson and NCPA Executive Vice President and CEO Kathleen Jaeger. "Local pharmacists can provide expert medication counseling and other cost-saving services that help mitigate the $290 billion that is estimated to be spent on an annual basis as the result of patients who do not adhere properly to their medication regimen."

Specific NACDS and NCPA recommendations included the following:

  • Increase the generic dispensing rate. Community pharmacies have a generic dispensing rate of 71%, which is higher than any other practice setting. If the Massachusetts fee-for-service Medicaid program generic dispensing rate (79.3%) were adopted nationwide, it would save $5.14 billion.
  • Retain prescription drug coverage as a vital component of state Medicaid programs. Eliminating these programs would result in costly downstream medical interventions to treat a variety of life-threatening conditions.
  • Incorporate into Medicaid patient care the medication therapy management services provided by community pharmacists. Pharmacists would be able to provide critical advice and guidance to patients with chronic conditions who very often need instruction and reinforcement to achieve optimal medication use.
  • For states considering adjustments to beneficiary cost sharing, make co-payment mandatory as permitted under federal law. Anderson and Jaeger note that requiring pharmacies to bear the costs of uncollected payments, which in some states is as high as 50%, is unfair, particularly at a time when pharmacy Medicaid reimbursements are being significantly cut.
  • Conduct comprehensive cost-of-dispensing studies and adjust state dispensing fees in states considering an average acquisition cost-based pharmacy-reimbursement formula. States need to recognize the importance of reimbursing pharmacies accurately for all aspects of prescription provision to Medicaid patients.

"Every day, community pharmacies witness firsthand the struggles that patients face in order to pay for their medications as well as the financial burden states face in attempting to provide for the needs of their Medicaid beneficiaries," wrote Anderson and Jaeger. "Community pharmacies are ready and willing to work collaboratively with CMS, individual states, and other payers to help reduce health costs."