Study Finds States Pay More for Rx Drugs
Posted on: Wednesday, 30 November 2005, 21:00 CST
By KEVIN FREKING
WASHINGTON - State Medicaid programs routinely pay much more for prescription drugs than do many businesses, hospitals and the Veterans Affairs Department, federal investigators said Wednesday.
Lawmakers as well as the Bush administration cited the study in calling for changes in the formulas that state Medicaid programs use to reimburse pharmacists.
Both the Senate and the House have passed bills that would lower how much the federal government pays pharmacists who serve Medicaid beneficiaries, but the two chambers have yet to work out the differences between the two bills.
"The government routinely overpays for prescription drugs. Until we revamp Medicaid's drug purchasing system, we're throwing away money that could be used to treat patients," said Rep. Joe Barton, R-Texas, chairman of the House Energy and Commerce Committee.
The Government Accountability Office said its review of Medicaid payments for brand-name drugs in 2003 showed that states paid 12 percent more than the price that drug wholesalers pay drug manufacturers. They paid 36 percent more than what many hospitals and other large-scale purchasers pay.
Most lawmakers agree state Medicaid programs should pay more than wholesalers pay. The question they're struggling with is how much more.
The Medicaid drug payment system reimburses pharmacies for drugs dispensed to beneficiaries. Pharmacists may be unable to purchase a drug at the price that wholesalers get it for, or hospitals get it for. Any change in the reimbursement formula could result in pharmacists losing money every time they see a Medicaid beneficiary, said one trade group.
"All we're asking for is to cover our expense for dispensing and a small margin for serving this patient base," said Charlie Sewell, vice president of government affairs for the National Community Pharmacists Association.
Mark McClellan, administrator for the Centers for Medicare and Medicaid Services, said the bottom line is that states pay prices that are out of whack with the market.
"The GAO report makes clear that the current payment rules result in overpayments for drugs and emphasizes the need for reform," McClellan said.
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On the Net:
Government Accountability Office: http://www.gao.gov
Source: Associated Press/AP Online
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