Drug-Cost Growth Tops Norm
Posted on: Monday, 28 November 2005, 18:00 CST
By John Davis, Montgomery Advertiser, Ala.
Nov. 27--Prescription drug costs are on the rise across the nation, but a recent survey suggests that Alabama's pharmaceutical costs may be growing faster than average.
A recent study by the Southern Legislative Conference ranks Alabama Medicaid fifth among the 16 conference states in terms of 2004 pharmacy program increases.
Between 2003 and 2004, the study reports, Alabama saw a 10.6 percent jump in its pharmacy costs, while Georgia had a 7.5 percent increase and Louisiana's drug costs rose by 6.1 percent. The SLC average was 9.2 percent.
Growth in the program can mean a significant amount of money since Alabama Medicaid spent $594 million on pharmacy services in 2004.
This money also provides work for Alabama pharmacists, people like Billy Beatty, owner of City Drug on Dexter Avenue.
He says that 40 percent of his clients rely on Medicaid to help pay for their prescription drugs. One in five Alabamians is eligible for Medicaid.
If Alabama's program was outpacing other states in drug spending two years ago, it might not be anymore, according to Medicaid Commissioner Carol Herrmann.
The commissioner said that through "aggressive pharmaceutical programs," Medicaid saved $119 million in pharmacy spending last budget year.
Increasing the use of generic drugs and requiring prior authorization for some medicines, along with other measures, have taken a bite out of Medicaid's drug bills, but these savings for the state will shrink as Alabama shifts some of its pharmacy responsibilities to the federal government.
Herrmann laments the fact that next year Alabama, and the rest of the states, will have to pay into Medicare for the first time ever. States are paying into Part D, Medicare's new prescription drug program.
In Alabama, the federal health-care system for the aged and infirm will remove about 90,000 people from Medicaid's pharmacy rolls.
The unprecedented state payout to Medicare, called a "clawback," will cost Alabama $143.7 million next year.
"Instead of paying a pharmacy ... we'll be paying Medicare," she said. In 2007, the clawback jumps to $229 million.
Alabama's Medicaid program is a bare-bones operation, according to Herrmann, doing little more than keeping up with federal standards for matching funds, which provide about 70 percent of the $4 billion program's annual budget.
The SLC report ranks Alabama near the bottom of conference states in terms of per-patient spending; Alabama Medicaid is 12th out of 16.
The reason for this, Herrmann said, is Alabama's tight state budget and inability to put more dollars into the program that would in turn attract federal money.
"You still have to come up with your state share," she said.
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Source: Montgomery Advertiser
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