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Walgreens offers to accept part of Delaware Medicaid Rx cut
June 24th, 2009
Kermit Crawford, Walgreens
DEERFIELD, Ill. – Walgreen Co. said Wednesday that, in talks with the state of Delaware, it has offered to accept part of a proposed cut in Medicaid pharmacy reimbursement rates.
Stating that it "has gone more than halfway in negotiations," the drug store chain said it would accept nearly two-thirds of the rate cut proposed by the state.
Earlier this month, Walgreens called the proposed reductions "extreme" and announced that it plans to stop filling Medicaid prescriptions starting July 6 in its 66 Happy Harry’s pharmacies in Delaware.
The company said it has given the required 30-day notice to Delaware that it will exit the state's Medicaid program on that date unless an agreement is reached beforehand.
According to Walgreens, half of Delaware’s Medicaid drug prescriptions are filled by Happy Harry’s and, under the current proposal, Happy Harry’s would lose money on 84% of the brand-name prescriptions it fills for the state's Medicaid program.
“The prospect of filling those prescriptions at a loss put us in a difficult position,” Kermit Crawford, senior vice president of pharmacy at Walgreens, said in a statement.
“Staying in the program meant we couldn’t provide the level of service these patients deserve," Crawford explained. "So we’re forced by the state to withdraw from Medicaid as of July 6 and refer those patients to other pharmacies where patients may find it difficult getting timely service.”
Walgreens noted that it is cautioning Medicaid patients that service disruptions at all Delaware pharmacies resulting from the state’s proposed rate cut will be more significant than the state expects.
In addition, the drug chain reiterated that it thinks it could help Delaware attain the Medicaid prescription savings it seeks by hiking dispensing of lower-cost generic drugs throughout the state’s pharmacy network.
Walgreens said Happy Harry’s fills 69% of Medicaid prescriptions with a generic, compared with 63% at all other pharmacies in the state. By bringing the other pharmacies up to Happy Harry’s generics-dispensing level, Delaware could save more than $7 million, according to the company.
“Cutting reimbursement rates to pharmacies isn’t in the best interests of patients, pharmacies or the state when that leads to less access for patients and higher costs,” Crawford commented. “We’ve proposed many other alternatives that will save the state much more than a harmful rate cut. ”