GAO Study Affirms Health Reform Law Sets Medicaid Pharmacy Reimbursement at More Reasonable Levels

Alexandria, Va. - Dec. 17, 2010

National Community Pharmacists Association (NCPA) Executive Vice President and CEO Kathleen Jaeger issued the following statement today on an analysis conducted by the Government Accountability Office (GAO) at the request of House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.):

"Independent community pharmacies are the backbone of the Medicaid drug benefit. They are often located in underserved urban and rural areas where many Medicaid recipients live and there are fewer health care providers than in the rest of the country. Local pharmacists can help these patients get the maximum benefit from their medications and save money by avoiding costlier trips to doctors' offices and emergency rooms.

"So it's critical for policymakers to ensure adequate reimbursement to maintain the patient-pharmacist relationship and keep local independent pharmacists in the Medicaid program. GAO's analysis confirms that the bipartisan provision included in the health reform law regarding Medicaid generic drug reimbursement strikes the right balance. The policy helps state and federal officials grappling with rising Medicaid costs, while preserving patient access and avoiding the draconian cuts that were previously enacted. We appreciate the support of Chairman Waxman for helping to fix this issue in the health care reform law.

"In addition, it's important to remember that many states either already have, or are in the process of, setting Medicaid generic reimbursement below the 'federal upper limits.' The report also doesn't determine whether dispensing fees paid to pharmacies are adequate to cover their costs of dispensing, which they are not in most states. Therefore, any payments that are made in excess of acquisition costs may be eliminated due to tighter state reimbursement, as well as inadequate dispensing fees. Simply reimbursing for acquisition costs alone wouldn't allow these small businesses to make ends meet, much less contribute to their local economies and communities.

"Community pharmacists are ready and willing to work with policymakers to find cost savings, improve outcomes and preserve patient access and choice. For example, 'generics first' initiatives utilizing community pharmacists can maximize the use of lower-cost medication and achieve significant savings."

Note: Click here to read Chairman Waxman's statement on the GAO report.

The National Community Pharmacists Association (NCPA®) represents the interests of America's community pharmacists, including the owners of more than 23,000 independent community pharmacies, pharmacy franchises, and chains. Together they represent a $93 billion health-care marketplace, have more than 315,000 employees including 62,400 pharmacists, and dispense over 41% of all retail prescriptions. To learn more go to or read NCPA's blog, The Dose, at

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