Illinois pharmacy reps appear before House panel re: Medicaid cuts

Illinois pharmacy reps appear before House panel re: Medicaid cuts


SPRINGFIELD—Stressing the perilous condition of independent pharmacies in Illinois and the devastating impact that proposed budget cuts will have on their ability to continue serving Medicaid patients, Terri McEntaffer, executive director of the Illinois Pharmacists Association, addressed a House Human Services Appropriations Sub-Committee hearing last week.

“Illinois pharmacists, especially independent pharmacies, are committed to serving their patients, Medicaid or cash-paying,” McEntaffer said. “Unfortunately, the costs of doing business continue to increase while reimbursement rates decrease. After last year’s $23 million decrease, pharmacies tightened their belts, some closed, many put off salary increases or dipped into their own retirement savings. Now, this year, the state is telling Illinois pharmacists that they shoulder another $120 million in cuts. With 20 million prescriptions a year, that comes to $6 per prescription. They cannot take that cut and survive.”

“The reality is that the Medicaid budget for prescription drugs rose $200 million in the last three years just due to increases in the number of prescriptions, rising from 14.9 million in 1998 to an expected 20.1 million prescriptions this year,” said David Vite, president of the Illinois Retail Merchants Association representing chain store pharmacies. “This increase is due to the movement from more expensive hospital-based therapies to medicine-based therapies. Basically, more people taking more medicine are driving up the cost of the Medicaid prescription program.”

Pharmacy reimbursements are not driving the Medicaid prescription costs, according to the Illinois Pharmacists Association, headquartered in Springfield. In fact, they say, as a percentage of the Medicaid prescriptions, reimbursements have decreased. The Medicaid pharmacy budget increases are due to skyrocketing wholesale drug costs that outpace the rate of inflation; greater demand for more expensive brand-name prescriptions; and the increased use of prescriptions as a form of preventive care and an alternative to hospitalization, McEntaffer asserts.

McEntaffer also voiced concern regarding a proposal to utilize a Pharmacy Benefit Manager (PBM) to administer the state’s Medicaid prescription reimbursement program. In other states, boards of pharmacy, consumers and practitioners have had growing concerns regarding the lack of oversight for PBMs–including such issues such as “drug switching” and the unauthorized release of confidential patient information. Because PBMs do not answer directly to any agency for their practices, Medicaid recipients will have nowhere to turn for resolution of any administrative problems they encounter.

Illinois has no need for a PBM because Medicaid is running a cost-efficient program, evidenced by the fact that Illinois Medicaid prescription costs average $41, while the national average for all prescriptions, including private plans like Blue Cross, is $49.84 per prescription,” said McEntaffer. “Thus, the average net cost for Illinois Medicaid prescriptions is 17.7 percent lower than the national average.”

“For many patients, the success of a prescribed treatment is dependent on proper counseling, regular monitoring and follow-up by trained pharmacists. If the state were to implement a PBM program, direct pharmacist interaction could be replaced with direct mail order delivery of medications–virtually eliminating the counseling and monitoring process for the children and elderly who depend on Medicaid,” McEntaffer said.

Two weeks ago, Dean Rogan Sr., a pharmacist from the small, rural town of Pulaski, who runs a pharmacy where more than 80 percent of his customers are Medicaid beneficiaries—came to Springfield to talk to legislators about the severity of the impending pharmacy crisis.

“If the state approves $121 million in cuts to Medicaid prescription reimbursements, I will have no choice but to close my pharmacy,” Rogan said. “If my pharmacy closes, my family will find a way to get by, but I worry for the hundreds of lower-income families who depend on us for their daily health care needs. Many of my poorest patients are elderly and homebound, and they would have trouble obtaining their prescriptions and the one-on-one counseling and follow-up they need. These cuts would devastate our community and leave our most vulnerable without access to basic prescription and health care services.”

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