Walgreens, Delaware reach agreement over Medicaid payments

CHICAGO The David and Goliath battle between a retail giant and the state of Delaware has ended, but with provisions.

After a three-month battle, Walgreens agreed Monday to 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 last month.

Walgreens had threatened it would cease filling prescriptions in the state because of the steep cut in Medicaid prescription payments; a cut which would have forced many Walgreens pharmacies in Delaware to operate at a loss, said SVP pharmacy Kermit Crawford.

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.

Meanwhile, Delaware administrators have asked that the National Association of Chain Drug Stores and the National Community Pharmacists Association drop a lawsuit they filed against its 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.

Walgreen said it would no longer support the lawsuit, Reuters reported.