Pharmacies Protest Medicaid Change

At least once last week, a pharmacist in Bowie got up in the middle of the night to fill a prescription for a customer in dire need. A pharmacist in Waldorf smiles as he tells of one customer who refills her prescriptions over a span of days just so she can talk to someone.

Independent pharmacists such as these -- the ones who own their businesses and pride themselves on personalized service -- could be put out of business next year by Medicaid legislation that reduces reimbursement rates for generic prescription drugs, said Howard R. Schiff, executive director of the Maryland Pharmacists Association.

To make their point, he and other independent pharmacists came to La Plata last week and held a news conference at a small-town drugstore.

"It hurts the pharmacists, it hurts the patients, and it hurts the community," Schiff said, standing in County Drug on Charles Street, the main route through La Plata. He was joined by three independent pharmacists: Jon Johnson of County Drug, Marie-Therese Oyalowo of Comcare Pharmacy in Bowie and David Houston of Anchor Pharmacy in Waldorf.

The change in reimbursement rates results from the Deficit Reduction Act 0f 2005, which cut $8.4 billion from Medicaid and mandated that the Centers for Medicare and Medicaid Services create a new way to calculate how much pharmacies are reimbursed for the generic prescriptions they fill for Medicaid patients. In July, the centers released a reimbursement rule to be implemented Jan. 30 that bases rates on drug price averages. The calculation of those averages includes sale and rebate prices available to some major chains and mail-order operations but not to most community pharmacies, Schiff said.

That means these pharmacies could be reimbursed, on average, for only 64 percent of what it costs them to provide generic prescriptions, he said, citing a 2006 Government Accountability Office report.

Johnson said that the gap would cripple his pharmacy in La Plata because Medicaid patients make up more than a third of his customers. Oyalowo and Houston said although they do not serve as many Medicaid customers, they would be forced to reduce or end services such as free delivery.

"You can't lose money on every sale and make it up in volume," Johnson said. "I need to be able to buy the product."

The fix to this pending dilemma, the pharmacists said, is H.R. 3140 -- the "Saving Our Community Pharmacies Act of 2007." The legislation would amend the calculation of average cost of prescriptions when calculating reimbursement rates by excluding prices that are not available to the small independent pharmacies.

In La Plata last week, the pharmacists urged House Majority Leader Steny H. Hoyer (D-Md.), whose district includes their businesses, to schedule a vote on the bill. The measure currently is awaiting action by the House Energy and Commerce Committee before it can be considered for action on the House floor.

In a statement responding to the issues raised, Hoyer said that he "fully understands the concerns of independent pharmacists regarding Medicaid reimbursements and is hopeful that Congress can address the issue in a timely manner."