NACDS, NCPA Provide Insights to Governors and State Medicaid Directors Confronting Medicaid Budgetary Challenges


Alexandria, Va. - Feb. 18, 2011

The National Association of Chain Drug Stores (NACDS) and the National Community Pharmacists Association (NCPA) have sent a joint letter to every Governor and State Medicaid Director, explaining the importance of pharmacies in Medicaid, offering recommendations, and expressing a desire to work together to cut costs without endangering Medicaid beneficiaries' access to pharmacy prescription drug services.

"Community pharmacies play a vital role in the Medicaid program as the backbone of its drug benefit," NACDS President and CEO Steven C. Anderson, IOM, CAE and NCPA Executive Vice President and CEO Kathleen Jaeger wrote in the letter. "Local pharmacists can provide expert medication counseling and other cost-saving services that help mitigate the $290 billion that is estimated to be spent on an annual basis as the result of patients who do not adhere properly to their medication regimen.

"Every day, community pharmacies witness firsthand the struggles that patients face in order to pay for their medications as well as the financial burden states face in attempting to provide for the needs of their Medicaid beneficiaries," they added. "Community pharmacies are ready and willing to work collaboratively with CMS, individual states and other payers to help reduce health costs."

The recommendations include:

  • Community pharmacies are leading the way to maximize generic drugs' appropriate use. Community pharmacy has a higher rate of generic dispensing (71%) than any other practice setting, including mail order pharmacy. The Massachusetts fee-for-service Medicaid program has a generic dispensing rate of 79.3%, a rate which could save $5.14 billion if achieved nationally.
  • Retain prescription drug coverage as a vital component to state Medicaid programs, as any savings from severing access to prescription medications are likely to be eclipsed by costly downstream medical interventions to control a variety of life-threatening conditions.
  • The community pharmacist can provide critical advice and guidance to patients with chronic conditions, who very often need instruction and re-enforcement of optimal medication use. Incorporating medication therapy management (MTM) services provided by pharmacists will help lead to increased savings.
  • For states considering adjustments to beneficiary cost sharing, we urge them to make these co-payments mandatory as permitted under federal law. Requiring pharmacies to bear the costs of uncollected co-payments—which in some states is as high as 50%—is unfair, particularly at a time when there have already been significant reductions in pharmacy Medicaid reimbursement.
  • States considering an average acquisition cost (AAC)-based pharmacy reimbursement formula should conduct comprehensive cost-of-dispensing studies and adjust state dispensing fees, recognizing the importance of reimbursing pharmacies accurately for all aspects of providing prescriptions to Medicaid patients.

The National Association of Chain Drug Stores (NACDS) represents traditional drug stores, supermarkets, and mass merchants with pharmacies – from regional chains with four stores to national companies. Chains operate 39,000 pharmacies, and employ more than 2.7 million employees, including 118,000 full-time pharmacists. They fill nearly 2.6 billion prescriptions annually, which is more than 72 percent of annual prescriptions in the United States. The total economic impact of all retail stores with pharmacies transcends their $830 billion in annual sales. Every $1 spent in these stores creates a ripple effect of $1.96 in other industries, for a total economic impact of $1.57 trillion, equal to 11 percent of GDP. NACDS represents 137 chains that operate these pharmacies in neighborhoods across America, and NACDS members also include more than 900 pharmacy and consumer packaged goods suppliers and service providers, and over 60 international members from 23 countries. For more information about NACDS, visit www.NACDS.org.

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 www.ncpanet.org or read NCPA's blog, The Dose, at http://ncpanet.wordpress.com.

Ask Your Family Pharmacist TM