- Resource Centers
You probably did not become a pharmacist in order to get involved in politics. If you have never written to your elected representatives, however, this could be a good time to start.
Almost all of you have suffered from reductions in reimbursement as you helped dual eligibles and others shift over to Medicare prescription drug plans. Now another threat to already-thin profit margins is looming: changes in Medicaid funding that are likely to cut reimbursement, particularly for generic drugs.
The changes are a result of the recently passed Federal Deficit Reduction Act of 2005, which alters the way the federal government pays states for drugs supplied to Medicaid recipients.
Starting next year, the Centers for Medicare & Medicaid Services will use a different formula for calculating what it pays for drugs, based on a new measure, Average Manufacturers Price (AMP). Not all the details of how AMP is calculated have yet been set in stone, and those details will influence its overall impact on reimbursement. One likely effect of the change, however, will be a sharp reduction in reimbursement for generics.
At a time when the rising cost of drugs is a factor in spiraling health care costs, the government should be doing everything possible to encourage the use of generic drugs. Instead, it is putting in place a plan that is likely to cut incentives for pharmacists to dispense low-cost generics instead of pricier branded drugs.
Even bigger implications for pharmacists are looming. Cutting billions of dollars from Medicaid drug payments will put more pressure on already-thin profit margins. It might well be the last straw for community pharmacists who are already struggling to stay in business. This reality stands in stark contrast to President Bush's recent comments about making sure that pharmacists do not "overcharge the system."
Although changes to Medicaid are inevitable, it is not too late to act. So, why not write to your elected representatives? Ask them to come and see for themselves the contrast between what is being said in Washington and the reality of running a pharmacy.
Tell your representatives that it is essential that AMP is calculated in a way that is fair to pharmacists so that they can continue to offer help to the millions of Medicaid recipients. Explain that there is a danger that the government, in trying to cut Medicaid costs, will actually discourage the use of cost-saving generic drugs. Ask them to vote against the even deeper cuts that have been proposed for the Medicaid budget beyond next year. If you are frustrated and angry, you can bet that thousands of other pharmacists feel the same way.Together, we can make a difference.
Mr. Eckel is professor and director of the Office of Practice Development and Education at the School of Pharmacy, University of North Carolina at Chapel Hill.