Published Online: Wednesday, February 1, 2006

Congressional budget legislation slashing Medicaid reimbursement to pharmacies is drawing dire predictions from health care leaders, who warn that many community pharmacies will be forced to abandon the program altogether. According to officials at the American Pharmacists Association (APhA), the congressionally approved budget reductions "will so adversely affect reimbursement rates that pharmacies will be faced with a very stark decision—turn away Medicaid patients or remain in business."

Chain drugstore industry leaders called the reimbursement cuts "a serious misstep in Medicaid reform."

Officials at the National Community Pharmacists Association (NCPA) warned that the legislation "would?end up costing billions of dollars unless the states act to fix this mess."

The budget axe would fall hardest on low-cost generic drugs, for which federal funding would be reduced by $3.6 billion over the next 5 years.

"The language of the bill makes it sound like pharmacists would be getting a good deal by dispensing generics, when in fact the new reimbursement would cover only about half of our cost for generic drugs,"said Bruce Roberts, NCPA executive vice president.

APhA officials cautioned that the new payment formula imposed by the legislation "could actually discourage the dispensing of generic drugs, a significant source of Medicaid savings."

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