NACDS, NCPA reach agreement with Delaware on Medicaid reimbursement for pharmacy

ALEXANDRIA, Va. A victory was won for patient care late Tuesday, as two organizations that represent the retail pharmacy industry reached a favorable agreement with the Delaware State Department of Health and Social Services.

The National Association of Chain Drug Stores and the National Community Pharmacists Association said that the agreement will restore much of the funding that would have been lost due to rate cuts in Medicaid reimbursement to pharmacists.

Initially, the lawsuit was filed against Delaware governor, Jack Markell; the state's department of health and social services; and its secretary, Rita Landgraf. NACDS and NCPA challenged rate cuts by the state of Delaware for Medicaid reimbursement for brand-name prescription drugs.

The associations joined together in filing a lawsuit challenging Delaware’s April 1, 2009 rate cuts for Medicaid reimbursement for brand name drugs, which results in reimbursement for many drugs at a level below a pharmacy’s break-even cost. As a result of reaching an agreement, the joint lawsuit filed by the associations is no longer necessary.

Following voluntary dismissal of the lawsuit, the state has agreed to set reimbursement for brand name drugs at average whole price minus 14.5 – an increase of 1.5% from the original reimbursement structure that led to the filing of the lawsuit. Delaware plans to reduce reimbursement for certain generic drugs, but pharmacies will have an opportunity to petition for increased reimbursement if the new rates are below pharmacy acquisition costs.

“We are pleased to have reached this agreement with Delaware which will result in better reimbursement for pharmacies so they can continue to serve their patients,” said NACDS president and CEO Steve Anderson. “Patients rely on their neighborhood pharmacies for prescription medications, counseling and other services that enable them to maintain their health and their family’s health. We appreciate the state’s cooperation in helping to preserve patient access to pharmacy services.”

Added NCPA EVP and CEO Bruce Roberts, “This agreement is the byproduct of good-faith negotiations. Our number one priority has always been ensuring that we can continue serving Medicaid patients. That relationship was jeopardized by severe cuts to pharmacy reimbursement. Thankfully, a better deal was reached to allow the state of Delaware, patients and pharmacies to weather these tough economic times without undermining patient access.”

As previously reported by Drug Store News, retail giant Walgreens also settled with the state of Delaware on the matter, agreeing to continue filling Medicaid prescriptions in the state of Delaware at a reimbursement rate of 85.5% of the average wholesale price for prescriptions, versus the 85% Walgreens and Delaware administrators agreed on in a temporary truce in July. Walgreens declared earlier this month that it would no longer support the lawsuit.

Medicaid, which provides health insurance to low-income people, is jointly funded by states and the federal government. One in five people in Delaware, or about 160,000, gets Medicaid benefits.