As states juggle financial and health care challenges in their Medicaid programs, the National Association of Chain Drug Stores and National Community Pharmacists Association are making sure officials don't overlook community pharmacy as a part of the solution.


National Association of Chain Drug Stores, National Community Pharmacists Association, NACDS, NCPA, Medicaid, governors, joint letter, health care challenges, Medicaid programs, Steve Anderson, Kathleen Jaeger, Kathleen Sebelius, Department of Health and Human Services, community pharmacy, pharmacy services, prescription drug, generic drug, pharmacy reimbursement, average acquisition cost, AAC, MTM, medication therapy management, prescription drug costs














































































































































































































































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NACDS, NCPA: Pharmacy is 'backbone' of Medicaid Rx

February 18th, 2011

ALEXANDRIA, Va. – As states juggle financial and health care challenges in their Medicaid programs, the National Association of Chain Drug Stores and National Community Pharmacists Association are making sure officials don't overlook community pharmacy as a part of the solution.

NACDS and NCPA said Friday that they have sent a joint letter to every governor and state Medicaid director to spotlight the importance of pharmacies in Medicaid and offer recommendations on how to rein in costs while preserving Medicaid recipients' access to prescription drug services.

Signed by Steve Anderson, president and chief executive officer of NACDS, and Kathleen Jaeger, executive vice president and CEO of NCPA, the joint letter was a response to a letter sent to all governors earlier this month by Kathleen Sebelius, secretary of the U.S. Department of Health and Human Services, to outline ways for making their states' Medicaid programs more cost-effective.

"Community pharmacies play a vital role in the Medicaid program as the backbone of its drug benefit. 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 the result of patients who do not adhere properly to their medication regimen," Anderson and Jaeger wrote in the letter.

"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. Community pharmacies are ready and willing to work collaboratively with CMS, individual states and other payers to help reduce health costs," the pharmacy trade group executives said.

Recommendations to governors and Medicaid officials made by NACDS and NCPA in the letter include the following:

• Community pharmacies are leading the way in generic drug utilization, with a higher rate of generic dispensing (71%) than any other practice setting, including mail-order pharmacy. The groups noted that Massachusetts' fee-for-service Medicaid program has a generic dispensing rate of 79.3%, a rate that could save $5.14 billion if achieved nationally.

• Retain prescription drug coverage as a vital component to state Medicaid programs, since any savings from cutting access to prescription medications are likely to be eclipsed by "costly downstream medical interventions" to control a variety of life-threatening conditions.

• Pharmacists can provide critical advice and guidance to patients with chronic conditions, who often need instruction and re-enforcement of optimal medication use. To that end, NACDS and NCPA said, medication therapy management (MTM) services provided by pharmacists could spur savings.

• States considering a pharmacy reimbursement formula based on average acquisition cost (AAC) should conduct cost-of-dispensing studies and adjust state dispensing fees, recognizing the importance of reimbursing pharmacies accurately for all aspects of providing prescriptions to Medicaid patients. "We urge all policymakers to be mindful that there are multiple components of pharmacy reimbursement: reimbursement for the drug product, reimbursement for the cost to dispense and payment for professional services such as MTM," NACDS and NCPA said in the letter.

• States mulling adjustments to beneficiary cost sharing should make these co-payments mandatory as permitted under federal law, the pharmacy groups stated. They explained that requiring pharmacies to bear the costs of uncollected co-pays — as high as 50% in some states — is unfair, especially when there have already been sizable reductions in Medicaid pharmacy reimbursement.

"Serving the Medicaid beneficiary population presents its own set of specific challenges, including the prevalence of multiple chronic conditions and the need for high-cost drug therapies in some cases," NACDS and NCPA concluded in the letter to governors. "The impending expansion of Medicaid eligibility in 2014 will result in additional challenges, for both states and health care providers. We are committed to working with you to develop cost effective solutions that control prescription drug costs while maintaining patient access to prescription drugs and pharmacy services."

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