Michigan pharmacists ask key lawmaker for Medicaid relief

TEMPERANCE, Mich. —Using a local community pharmacy as the setting for their appeal, independent pharmacists in Michigan rallied here Sept. 5 to enlist the support of one of the most powerful members of Congress in their battle to turn aside looming and potentially disastrous changes to the government’s Medicaid generic prescription drug payment policy.

Several independent pharmacy leaders staged a press conference at Crary Drug as a direct appeal to Rep. John Dingell, D-Mich., chairman of the U.S. House Energy and Commerce Committee and a longtime supporter of small-business interests. They urged Dingell to use his clout as committee chairman to help push legislation to alter the new Medicaid generic reimbursement policy issued by the Centers for Medicare and Medicaid Services.

The new guidelines, set to take full effect Jan. 30, 2008, will base Medicaid payments to pharmacies for generic drugs to a new, lower reimbursement formula, based on the average manufacturer price of the drug and a 250 percent markup. Pharmacy advocates contend the new policy will force retail owners to operate at a loss when dispensing generics to Medicaid patients, and could either force them out of the program or out of business altogether.

Speakers at the briefing included Tim Kirk, the owner of Crary Drug, which operates in Dingell’s district and has been visited previously by the veteran congressman. Also speaking were Chuck Hastings, president of the Michigan Pharmacists Association and owner of Northline Sav-Mor Drugs; Jim Yinger, owner of Yinger Pharmacy Shoppe; and Larry Wagenknecht, chief executive officer of the Michigan Pharmacists Association.

Both Hastings and Yinger spoke at the event of the havoc the new AMP-based payment policy could wreak on their businesses, while Wagenknecht warned that many independents in the state “will even go out of business if their percentage of Medicaid patients is high.”

“When that happens, not only will economically disadvantaged Medicaid patients—over 50 percent who are children—be hurt, but also everyone else who relies on the independent pharmacies such as Medicare Part D patients,” he added.

“AMP is not an accurate measure of actual retail acquisition cost because it includes many sales prices that are not available to independent pharmacies like Crary Drug in the calculation,” Wagenknecht said. “CMS has designed a reimbursement system that will cause many independent pharmacies to either limit or completely drop their participation in the Medicaid program.”

The pharmacy leaders are urging Dingell to support the Saving Our Community Pharmacies Act of 2007. Also known as H.R. 3140, the bill redefines the benchmark for pharmacy reimbursement to more accurately reflect pharmacy acquisition costs, its backers say. It also excludes from that pricing model all sales from mail-order facilities and pharmacy benefit manager price concessions and rebates that aren’t provided to retail pharmacy, and includes provisions to drive generic utilization that would increase government savings, the National Community Pharmacists Association argued.

“Chairman Dingell visited Crary Drugs in August of 2006 to discuss these issues with me,” Kirk said. “When he left, he agreed that things needed to be fixed. He said he would do what he could to make this happen. I am asking him now to please act and push H.R. 3140 through Congress.”

A similar bill, S.1951 or the Fair Medicaid Drug Payment Act of 2007, recently was introduced in the Senate. “Any differences between the bills will need to be reconciled in conference committee, but that can’t happen without Dingell jump-starting the process in the House,” NCPA noted in a statement.