Pharmacy groups file suits in three states over 'unlawful' Medicaid cuts

ALEXANDRIA, Va. Organizations representing the retail pharmacy industry and the nation's community pharmacists have filed federal lawsuits against three states, claiming that they have not met legal requirements to assure Medicaid patients receive access and quality of care at least equal to patients in the general public.

The National Association of Chain Drug Stores and the National Community Pharmacists Association said Tuesday that the states of California, New York and Washington are violating the Social Security Act, which required states to adjust reimbursement rates as a result of reductions to the average wholesale price of drugs. The lawsuits challenge the states’ "failure to take action to prevent pharmacies from being reimbursed at below cost for prescription drugs under state Medicaid programs."

“Pharmacies provide vital medications and services to Medicaid patients that improve and save lives, and help prevent higher long-term healthcare costs,” said NACDS president and CEO Steve Anderson in a statement released late Tuesday. “Some private payers and some states already have taken action to adjust reimbursements appropriately, to maintain the quality and accessibility of pharmacy patient care and its benefits. Federal Medicaid law obligates the states, including California, New York and Washington, to do the same.”

Added NCPA EVP and CEO Bruce Roberts, “The failure to act by these states has produced a perverse outcome whereby underserved patients who need access to health care the most, will get it the least. Independent community pharmacies frequently serve urban or rural areas where a disproportionate share of Medicaid beneficiaries live. In some of these communities, the pharmacy is the only healthcare provider for miles around. Left unchecked, these unfair cuts could push some community pharmacies to the breaking point. Even in tough budget times, the reductions are short-sighted. Faced with diminished pharmacy access, Medicaid patients will turn to more expensive doctor’s offices or emergency rooms – driving up costs to the state.”

For the federal law against California, NACDS and NCPA have filed as plaintiffs in the lawsuit. In the lawsuit against the state of New York, in addition to NACDS and NCPA, the Pharmacists Society of the State of New York filed as a co-plaintiff in the lawsuit. In the suit against the state of Washington, NACDS and NCPA the following filed as co-plaintiffs, in addition to Washington State Pharmacy Association, as well as individual pharmacy companies.