Pharmacy groups sue over Medicaid drug cuts

Cuts to Medicaid prescription drug payments in four states could jeopardize patients' access to needed medications, according to separate lawsuits filed by several national and state pharmacy organizations.

The National Assn. of Chain Drug Stores, the National Community Pharmacists Assn. and local pharmacy groups allege that the state Medicaid programs are basing their payment rates on artificially low benchmarks for the average wholesale price for various prescription drugs. As a result, many pharmacies are being paid well below the cost of stocking medications and may be forced either to drop their Medicaid contracts or close their doors altogether, according to complaints filed Sept. 29 in separate federal courts in California, Minnesota, New York and Washington.

The pharmacy organizations argue that the reductions violate federal laws requiring payment rates be set at sufficient levels to ensure that Medicaid patients have the same access to prescription drugs as patients who are not participating in federal health care programs. State health officials also failed to get the requisite prior approval from the Centers for Medicare & Medicaid Services before instituting the pay reductions, the suits allege.

NCPA Executive Vice President and CEO Bruce T. Roberts said independent pharmacies in urban and rural areas frequently serve a disproportionate share of Medicaid beneficiaries. "Left unchecked, these unfair cuts could push some community pharmacies to the breaking point" and drive up health care costs if patients are forced to seek more expensive care in doctors' offices or emergency departments, he said.

The pharmacy groups are asking state health officials to restore the Medicaid prescription drug payments to appropriate levels. The governors' offices in California and New York did not return calls seeking comment by this article's deadline. Minnesota officials could not be reached.

A spokesman for Washington Gov. Chris Gregoire said attorneys are still examining the state lawsuit, "but we don't believe it has merit, as our state has not altered its payment practices toward pharmacies."