NACDS Backs Bill to Help Increase Medicaid's Use of Generic Medications

Published Online: Friday, November 4, 2011
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The National Association of Chain Drug Stores (NACDS) has endorsed legislation by US Rep. Charles Bass (R-NH) that would incentivize states to utilize generic medications through the Medicaid program. NACDS emphasizes that community pharmacy has the best track record when it comes to fostering generic utilization, and that the full array of pharmacy services are vital for improving patient health and reducing healthcare costs across the board.

In a letter to Rep. Bass about the Affordable Medicines Utilization Act, NACDS pointed out that the majority of Medicaid prescriptions (70%) are filled by chain pharmacies. “Local pharmacies across the country work with state Medicaid programs to promote best practices, and help to implement policies that promote the use of generic medications. Increasing generic utilization is the most effective way to control prescription drug costs,” it read.

“Community pharmacies are leading the way to maximize the use of generic drugs, with a higher generic dispensing rate—71%—than any other practice setting. For every 1% increase in generic utilization, the Medicaid program could save approximately $809 million. For example, in calendar year 2010, the Hawaii fee for service Medicaid program had the highest generic dispensing rate in the nation, at 82.7%. If all other states could match the Hawaii rate, the Medicaid program could save $9.49 billion.”

The bill would provide states 50% of the share of generated savings in cases where a state has an increase in generic utilization rate for fiscal years 2012, 2013, and 2014.

NACDS maintains that while community pharmacies have worked, and continue to work, in partnership with public and private payers to reduce prescription drug costs, such spending should not be evaluated in a vacuum. NACDS emphasizes that patient access to convenient and cost-effective pharmacy services, including medication counseling, vaccinations, screenings and health education, help to improve patient health and prevent the need for costly forms of care.

Rep. Bass’ legislation is the companion to S. 1356, bipartisan legislation in the US Senate.

To read the NACDS’ letter to Rep. Bass, click here.
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