Community pharmacies are the “backbone” of the Medicaid drug benefit, says Steve Anderson, president and chief executive officer of the National Association of Chain Drug Stores.


Community pharmacies, Medicaid, drug benefit, Steve Anderson, National Association of Chain Drug Stores, Kathleen Jaeger, National Community Pharmacists Association, state Medicaid directors, pharmacists, medication counseling, Medicaid beneficiaries, CMS, Centers for Medicare and Medicaid Services, Christine Gregoire, National Governors Association, generic drugs, retail pharmacy, prescription medications, medication therapy management, Medicaid pharmacy reimbursement, pharmacy reimbursement, AAC, average acquisition cost


































































































































































































































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Medicaid drug benefit a battleground

March 14th, 2011

ALEXANDRIA, Va. – Community pharmacies are the “backbone” of the Medicaid drug benefit, says Steve Anderson, president and chief executive officer of the National Association of Chain Drug Stores.

Anderson made that point in a letter to governors and state Medicaid directors cowritten with Kathleen Jaeger, executive vice president and chief executive of the National Community Pharmacists Association.

“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 a result of patients who do not adhere properly to their medication regimen,” the letter states.

“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,” Anderson and Jaeger add.

“Community pharmacies are ready and willing to work collaboratively with CMS [Centers for Medicare and Medicaid Services], individual states and other payers to help reduce health costs.”

Medicaid is one of the biggest expenses for cash-strapped states, and all 29 Republican governors, as well as some Democrats, are seeking permission from the Obama administration to limit eligibility for the program. A provision in last year’s health care reform law cuts federal funding to states that institute such limits.

“We’re asking for cooperation so that we can work our way through what is a very challenging time for us,” Washington Gov. Christine Gregoire (D.) said at last month’s National Governors Association meeting. Reining in Medicaid costs was a top concern at the event.

The White House has moved toward permitting a small decrease in eligibility and more cost-sharing for enrollees but has given no indication that it will allow larger cuts.

The letter from Anderson and Jaeger notes that community pharmacies are leading the way in maximizing generic drugs’ appropriate use. Retail pharmacy has a higher rate of generic dispensing (71%) than any other practice setting, including mail-order pharmacy.

The Massachusetts fee-for-service Medicaid program has a generic dispensing rate of 79.3%, the highest in the country and one that could save $5.14 billion if achieved nationally, they say.

Prescription drug coverage should never be considered an optional Medicaid benefit, the letter says. That’s because any savings from severing access to prescription medications are likely to be eclipsed by costly downstream medical interventions to control a variety of life-threatening conditions.

Also, pharmacists can provide critical advice and guidance to patients with chronic conditions, who often need instruction and reinforcement of optimal medication use, say Anderson and Jaeger. Incorporating medication therapy management services provided by pharmacists will help lead to increased savings, they add.

States considering adjustments to beneficiary cost sharing are urged to make these co-payments mandatory, as permitted under federal law. Requiring pharmacies to bear the costs of uncollected co-payments — as high as 50% in some states — is unfair, particularly since there have already been significant reductions in Medicaid pharmacy reimbursement, according to the letter.

States considering an average acquisition cost (AAC)-based pharmacy reimbursement formula should conduct comprehensive cost-of-dispensing studies and adjust state dispensing fees, recognizing the importance of reimbursing pharmacies accurately, the letter adds.

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