Pharmacy groups hail bipartisan effort to lift Medicaid generic dispensing rates

NEW YORK A small group of U.S. representatives from both parties has asked House Speaker Nancy Pelosi for changes in health-reform legislation that would boost payment rates to hard-pressed pharmacies when dispensing generic drugs to Medicaid patients.


Given the precarious financial condition facing many community pharmacies and the fact that the current, Bush-era plan for Medicaid reimbursements would probably put some of them out of business, the appeal by those 16 members of Congress is a welcome move. The only question is why aren’t hundreds of their colleagues joining in?



It’s not just a question of fair compensation for community pharmacies, as important an issue as that is. It’s a question of addressing head-on the nation’s massive deficit and out-of-control spending for federal health programs, which is often touted as one of the prime reasons for health reform. After all, the net effect of the change in Medicaid reimbursement rates would be to pay pharmacies a meager reward for saving taxpayers billions of dollars annually, by encouraging patients to use the lower-price generic brand when the choice is available.



The 16 lawmakers — 12 Democrats and four Republicans — are asking the House leadership to assure that retail pharmacists aren’t forced to dispense Medicaid prescriptions at a loss. How? By incrementally raising the federal upper limit and the “weighted average” on what the program pays pharmacists for dispensing generic drugs.



To most of us outside the Beltway, it seems simple enough. Failure to include a workable Medicaid generic payment rate in the massive health-reform bill “could reduce Medicaid patients’ access to many pharmacies and negatively impact generic dispensing,” the House members told Pelosi. It would also perpetuate a cockeyed federal reimbursement system that gives pharmacists and patients absolutely no incentive to save the system money by switching, when possible, to lower-cost generics.



After all, if you’re a pharmacist, why make the effort if you’re going to lose money every time you dispense the generic? And if you’re a Medicaid beneficiary, why not take the higher-cost branded version of the drug? Somebody else is paying the tab.



What a concept: Actually addressing the crisis in rising healthcare costs — which already comprise one-sixth of the nation’s economy and threaten to bankrupt Medicare and Medicaid — by giving retail pharmacists and patients a reason to change to a me-too medication, which can sometimes cost a small fraction of the price for the original branded drug. Given the seemingly irrational way Congress often generates legislation, and the power of interest groups to shape that legislation, it’s almost mind-boggling that some lawmakers are trying to do something rational to address the unsustainable rise in healthcare costs.


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