With Medicaid paying 35% more in some cases for prescription drugs than pharmacy benefit managers pay, the Centers for Medicare and Medicaid Services has announced a proposed rule to save $8.4 billion in state and federal funds over five years, or a reduction of 5.6% of Medicaid’s spending on drugs, reports The New York Times. Fulfilling a mandate of the Deficit Reduction Act of 2005, CMS is proposing to recalculate the “average manufacturer price” for brand-name and generic drugs, which states use to set Medicaid reimbursement rates for drugs, effectively limiting payment for prescription drugs for which a generic equivalent is available. Drug manufacturers will be required to offer Medicaid the same discounts and best prices they offer pharmacy benefit managers, but 90% of the savings from the proposal will come from pharmacies that will have to find sources of generic drugs at prices below the new limits. (Read more about the proposed rule.)
But Bruce Roberts, executive vice president of the National Community Pharmacists Association, called the proposal “shortsighted and dangerous” because it will force community pharmacists out of the Medicaid program, leaving Medicaid beneficiaries without access to prescription medications. “Under this plan, pharmacists would be losing an average of $3 to $4 for every generic prescription dispensed,” Roberts said. “More than half of all prescriptions dispensed by retail pharmacies are for generic medications, so losing money on every one dispensed to a Medicaid patient is a recipe for economic disaster.” Approximately 25% of all prescriptions dispensed by independent pharmacists are to Medicaid patients.
