Reform will bolster pharmacy, GAO confirms

Independents warn of potential state cuts

ALEXANDRIA, Va. — A study by the Government Accountability Office confirmed that the health-reform law enacted earlier this year established a more reasonable reimbursement level for pharmacies dispensing generic drugs to patients covered by Medicaid. But pharmacy retailers still face the continued threat of further Medicaid cuts at the state level, the independent pharmacy lobby warned Friday.

The GAO analysis, conducted at the request of House Energy and Commerce Committee chairman Henry Waxman, concluded that the Patient Protection and Affordable Care Act would shield pharmacies from the draconian cuts originally proposed by some policy-makers in the run-up to health reform. Reacting to the report Friday afternoon, Waxman, D-Calif., said that changes made in the new health-reform law “solved long-standing concerns about underpaying pharmacists for generic drugs under the Medicaid program."

“This is a great example of the important improvements made possible through the healthcare-reform law,” Waxman said. “The law averted massive payment cuts to pharmacists for generic drugs under Medicaid, and did so in a responsible way for taxpayers.”

The California Democrat said the GAO study’s conclusions underscored the need to preserve the tenets of the reform law against Republican opposition. “This is another reason why the Republican push to repeal the healthcare-reform law is a terrible idea,” he asserted. “Repeal would hurt pharmacists and other healthcare providers, leave millions of Americans uninsured, and increase the deficit.”

Kathleen Jaeger, EVP and CEO of the National Community Pharmacists Association, hailed the federal findings. “GAO’s analysis confirms that the bipartisan provision included in the health-reform law regarding Medicaid generic drug reimbursement strikes the right balance,” she said. “The policy helps state and federal officials grappling with rising Medicaid costs, while preserving patient access and avoiding the draconian cuts that were previously enacted. We appreciate the support of [Waxman] for helping to fix this issue in the healthcare-reform law.”

However, Jaeger added, “it’s important to remember that many states either already have, or are in the process of, setting Medicaid generic reimbursement below the ‘federal upper limits.’" The report also doesn’t determine whether dispensing fees paid to pharmacies are adequate to cover their costs of dispensing, which they are not in most states.

“Therefore, any payments that are made in excess of acquisition costs may be eliminated due to tighter state reimbursement, as well as inadequate dispensing fees,” the NCPA’s top executive warned. “Simply reimbursing for acquisition costs alone wouldn’t allow these small businesses to make ends meet, much less contribute to their local economies and communities.”

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