SOURCE: American Pharmacies

October 31, 2005 12:55 ET

Congressional Plan Reduces Patient Access to Pharmacies

Community Pharmacies Offer $19 Billion Alternative

SAN ANTONIO, TX -- (MARKET WIRE) -- October 31, 2005 -- Imprudent cuts in reimbursements to independent pharmacists participating in Medicaid will drive pharmacies out of Medicaid because the actual cost of the drugs and dispensing them exceeds reimbursement, according to American Pharmacies, Inc., which represents approximately 400 community pharmacists throughout Texas.

"The Medicaid Reform bill passed by the House Energy and Commerce Committee by voice vote takes 60 percent of the overall cuts in Medicaid spending out of pharmacy reimbursement, which is only 2 percent of overall Medicaid spending," said APRX Vice President for Pharmacy Affairs Richard Beck. "This bill is awful and the Senate bill is horrible for retail community pharmacy."

Congress is under pressure to cut $5.2 billion from Medicaid pharmacy reimbursement over the next five years. Current calculations show pharmacists will be reimbursed at or below acquisition cost of the drugs, and an inadequate dispensing fee. A 2005 University of Texas study sets the average dispensing cost at $9.62 per prescription and covers operational expenses from wages and benefits to taxes and utilities.

"Amazingly, big pharma already has an average 18 to 25 percent in net profits," Beck said. "This bill does nothing to reduce the high cost of Medicaid medications; it only eliminates any profit to community pharmacists, thus eliminating them from the Medicaid program."

A better way to reduce Medicaid prescription costs is for physicians to prescribe more generic drugs. The savings for every 1 percent of drugs switched from brand name to generic exceeds $475 million a year, resulting in more than $19 billion over five years for Medicaid.

"The important thing for Congress to understand is that the House committee's Medicaid cuts will actually drive up Medicaid costs," Beck said. "When vulnerable Medicaid patients lose access to their medications, it will increase emergency room visits and nursing home and hospital stays."

American Pharmacies represents more than 400 independent pharmacists dedicated to quality pharmacy services for their communities. Most are in Texas, but members also are in Oklahoma and Louisiana.

Contact Information

  • For more information:
    Richard Beck, R.Ph.
    Phone: 877-634-5445
    Cell: 210.912.1325
    e-mail: Email Contact