Medicaid Cuts Target Pharmacies
Amongst other cuts in the current White House budget for the coming fiscal year are modifications to reimbursement calculations for generic drugs covered by Medicaid.
The new reimbursement rate is calculated based on an “average manufacturer price”; this rate includes discounts or rebates procured by organizations that have significant negotiating power such as pharmacy-benefit managers that oversee drug benefits for employer sponsored plans. Smaller pharmacies may not benefit from such discounted pricing rates and pay a higher premium to purchase drugs.
Pharmacies are reimbursed for the cost of buying drugs by the federal government and State governments reimburse for the cost to dispense. A report from the Government Accountability Office (GAO) noted that the proposed reimbursement strategy would undercut pharmacy costs by 36 percent, findings which are disputed by the Centers for Medicare and Medicaid Services.
Worries about the proposed reimbursement plan include a bias by pharmacies to fill brand name prescriptions in lieu of generic counterparts to preserve income. Others suggest that pharmacies will cease filling prescriptions for generic alternatives submitted by Medicaid recipients. See further coverage from The Wall Street Journal.
Related stories:
- Congress Members Rally to Prevent Medicare Cuts
- Congress Opposes Cuts to CMS Funding
- Congressmen Seek Lower Cost Alternatives to Biotech Drugs
March 29, 2007 Related topics: Legal & legislative, Pharmaceuticals