The National Association of Chain Drug Stores has dropped a lawsuit against Delaware after the state's Department of Health and Social Services agreed to restore much of the funding that would have been lost due to rate cuts in Medicaid pharmacy reimbursements.


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NACDS, Delaware reach accord on Medicaid Rx reimbursement

August 26th, 2009
Steve Anderson, NACDS CEO

ALEXANDRIA, Va. – The National Association of Chain Drug Stores has dropped a lawsuit against Delaware after the state's Department of Health and Social Services agreed to restore much of the funding that would have been lost due to rate cuts in Medicaid pharmacy reimbursements.

NACDS and the National Community Pharmacists Association (NCPA), which also was a party to the suit, announced the agreement late Tuesday. Under the accord, Delaware will set reimbursement for brand-name drugs at average whole price (AWP) minus 14.5, which NACDS said is an increase of 1.5% from the original reimbursement structure that led to the filing of the suit.

Delaware plans to reduce reimbursement for certain generic drugs, but pharmacies will be able to petition for increased reimbursement if the new rates are below pharmacy acquisition costs, according to NACDS.

"We are pleased to have reached this agreement with Delaware, which will result in better reimbursement for pharmacies so they can continue to serve their patients," NACDS president and chief executive officer Steve Anderson said in a statement. "Patients rely on their neighborhood pharmacies for prescription medications, counseling and other services that enable them to maintain their health and their family's health. We appreciate the state’s cooperation in helping to preserve patient access to pharmacy services."

NACDS and NCPA filed the suit in the wake of Delaware's April 1 rate cuts for Medicaid reimbursement for brand-name drugs, which the associations said would result in reimbursement for many drugs at below a pharmacy's break-even cost.

"Our number one priority has always been ensuring that we can continue serving Medicaid patients. That relationship was jeopardized by severe cuts to pharmacy reimbursement," NCPA executive vice president and CEO Bruce Roberts commented. "Thankfully, a better deal was reached to allow the state of Delaware, patients and pharmacies to weather these tough economic times without undermining patient access."

Earlier this month, Walgreen Co. agreed to keep filling prescriptions for Medicaid patients in Delaware after announcing in June that it would stop doing so at its 66 Happy Harry's stores in the state, citing what it called excessive cuts in pharmacy reimbursements. The drug store chain twice extended its deadline for remaining in the program.

Walgreens and Delaware agreed in principle to a reimbursement rate of 85.5% of the AWP, a bit more than the 85% rate that the state had accepted in earlier negotiations with the chain. Delaware wouldn't make the agreement official until NACDS and NCPA dropped their suit against the state.

Delaware's Department of Health and Social Services (DHSS) said Wednesday that it will achieve all of the savings it sought from the Medicaid program for fiscal 2010.

"This agreement gets the budget savings that taxpayers deserve," DHSS secretary Rita Landgraf said in a statement. "The 160,000 Medicaid clients in Delaware will still be able to get their prescriptions filled at any of the Walgreens/Happy Harry’s stores in Delaware, as well as other pharmacies that accept Medicaid prescriptions, including Rite Aid, Acme, Pathmark, Super G and Target, plus independently owned pharmacies."

 

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