The National Association of Chain Drug Stores and the National Community Pharmacists Association have filed a lawsuit challenging rate cuts by the state of Delaware for Medicaid reimbursement for brand-name prescription drugs.


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Rx groups file suit against Delaware Medicaid cuts

June 11th, 2009
Steve Anderson, NACDS

ALEXANDRIA, Va. – The National Association of Chain Drug Stores and the National Community Pharmacists Association have filed a lawsuit challenging rate cuts by the state of Delaware for Medicaid reimbursement for brand-name prescription drugs.

NACDS and NCPA said the rate reductions, which went into effect April 1, slash reimbursement levels for many drugs to below a pharmacy’s break-even cost.

Pharmacy representatives have been in talks with Delaware's Department of Health and Social Services and Gov. Jack Markell since April 1 to address the matter, but early this month the discussions broke off, resulting in the lawsuit, according to the two pharmacy groups.

NACDS and NCPA also have filed a motion for a preliminary injunction asking the U.S. District Court for Delaware to suspend the cuts while the judge considers the lawsuit. The suit names Gov. Markell, Delaware secretary of Health and Social Services Rita Landgraf and the state's Department of Health and Social Services.

The pharmacy groups said the cuts would lead to an average reduction of $3.63 in the pharmacy reimbursement for branded prescription drugs — lower than the average pharmacy’s break-even cost for more than 76% of all branded prescriptions, resulting in an average loss of $3.84 per prescription.

In the suit, NACDS and NCPA claim Delaware violated federal law by ignoring the negative impact that the cuts would have on patient access to quality health care. The suit also contends that the state failed to comply with Delaware’s Administrative Procedures Act in enacting the rate cut, the groups said.

“This lawsuit was filed by pharmacies, but it is truly on behalf of Delaware’s Medicaid patients whose access to medications is threatened by these devastating cuts,” NCPA executive vice president and chief executive officer Bruce Roberts said in a statement.

NACDS president and CEO Steve Anderson commented, “Patient access to pharmacy services will be in jeopardy if these cuts take effect.”

At least one major drug store chain in Delware has taken action in response to the reimbursement cuts.

Earlier this month, Walgreen Co. announced that it plans to stop filling Medicaid prescriptions starting July 6 in its 66 Happy Harry’s pharmacies in the state. Walgreens said the new reimbursement rule is slated to become part of Delaware’s new fiscal budget beginning July 1.

The state is reportedly trimming the reimbursement rate for branded prescriptions from 86% of the average wholesale price to 84%.

 

MORE REIMBURSEMENT ISSUE COVERAGE:

Walgreens to exit Delaware Medicaid program

NACDS, FMI file principal arguments in AWP lawsuit

Solution to Medicaid problem within reach

Washington state pursues cut in Medicaid

Judge blocks Medicaid cuts in Washington state

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