BREAKING: Walgreens to cut 40% of Washington state Medicaid business

[FORTLIVINGROOM]

They'll be cutting Medicaid in 44/111 stores in the state.


http://www.reuters.com/article/domesticNews/idUSTRE52T7KA20090330

SEATTLE (Reuters) - Drugstore company Walgreen Co said on Monday it would pull almost half its pharmacies in Washington state from the U.S. Medicaid program in protest against the state's plan to cut reimbursements for drugs.
Cash-strapped Washington state plans to insist on cheaper, generic drugs for low-income Medicaid clients whenever available and equivalent to brand-name drugs, and is also cutting the rate of reimbursements on all drugs to pharmacies which supply them.
Cutting the reimbursement rate of generic and brand-name drugs would severely impact the "economic viability of doing business in Washington," Walgreen said in a statement.
Walgreen, one of the largest U.S. pharmacy chains, is to withdraw 44 of its 111 pharmacies in the state of Washington from the Medicaid program. Medicaid provides health insurance to low income individuals.
Unlike Medicare, the federal health program for seniors, Medicaid is partially funded by states. In order to cut the costs of the program, Washington state announced last week it would cut Medicaid reimbursements for brand-name prescription drugs by 6 percent, effective on Wednesday.
Walgreen said it would withdraw the 44 pharmacies from Medicaid as of May 1, a month after Washington introduces its plan. It said those pharmacies represent more than 60 percent of its total Medicaid business in the state.
There is a chance other pharmacies such as CVS Caremark Corp and Rite Aid Corp will follow suit in pulling out of Washington's Medicaid program.

Something tells me CVS will use this to promote their PBM business...and of course the Health "Reform" Czar will use it as a plug for that one PBM she sits on the Board of Directors for...oh what's the name? You know, that one that was fined XXX Million for ripping off the government?

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[ItsOverZyvox]

wow..

 

[type b pharmD]

They'll be cutting Medicaid in 44/111 stores in the state.


http://www.reuters.com/article/domesticNews/idUSTRE52T7KA20090330




Something tells me CVS will use this to promote their PBM business...and of course the Health "Reform" Czar will use it as a plug for that one PBM she sits on the Board of Directors for...oh what's the name? You know, that one that was fined XXX Million for ripping off the government?

way to stick it to the man... that's pretty hardcore

 

[FORTLIVINGROOM]

Reducing reimbursement for brand meds is reasonable, and these large chains like Walgreens/CVS switch pts. to generic whenever possible.

But cutting reimbursement on generics? This will be interesting...maybe Obama will fire the CEO of Walgreens???

 

[type b pharmD]

Reducing reimbursement for brand meds is reasonable, and these large chains like Walgreens/CVS switch pts. to generic whenever possible.

But cutting reimbursement on generics? This will be interesting...maybe Obama will fire the CEO of Walgreens???

it's interesting that they only plan to withdraw 44 stores. Are the rest only selling to cash paying and rich patients? Or is walgreens just grandstanding.

 

[SpirivaSunrise]

it's interesting that they only plan to withdraw 44 stores. Are the rest only selling to cash paying and rich patients? Or is walgreens just grandstanding.

That's what I was wondering...why those 44? Why not all if you're going to make that stand?

 

[Old Timer]

Reducing reimbursement for brand meds is reasonable, and these large chains like Walgreens/CVS switch pts. to generic whenever possible.

But cutting reimbursement on generics? This will be interesting...maybe Obama will fire the CEO of Walgreens???

If I wasn't sure you were misinformed, I would have to assume you were a complete and total ***** with amount of knowledge you posses about pharmacy reimbursement something you would have to search for in a thimble.

What you really don't point out as that a 6% reduction in brand name reimbursement would mean the death knell for any independent pharmacy left in the state of Washington.

Do you think pharmacy reimbursement is so high this can easily be absorbed. Maybe if you want to make $25.00 per hour when you graduate.

 

[Old Timer]

That's what I was wondering...why those 44? Why not all if you're going to make that stand?

Because they account for 60% of their Medicaid volume. This means that poor people will have much less access to pharmacies.....

 

[RutgersEMSOP10]

what are the implications of this??

meaning, is at least one health care instititon finally taking a reasonable stand against the ridiculousness that is third party payment by the government?

My first reaction is, it's about time. But are there other issues that maybe I'm too naive to recognize that may negatively affect us (health care workers)?

 

[Aznfarmerboi]

This happenned before except instead of chains backing out, it was independent. They stayed alive with those cuts but barely. After 6 months, they resumed taking it since state was just sending in mobile rx to underserved areas instead. These cuts in addition to those cuts are looking pretty serious if Walgreens is backing out stores in protest. First time I have heard of that.

 

[FORTLIVINGROOM]

That's what I was wondering...why those 44? Why not all if you're going to make that stand?

I'm sure we can all agree they just want the state to repeal the proposed cut.


But I tell ya what...I'm tired of seeing Medicaid pts come into the ER with a sore leg...or some other BS "abd pain". I'm sure all of you have seen patients who have come to the ER with a CC of "I'm out of Vicodin"

What the **** has this nation come to when we spend all this money on expensive imaging but politicians resort to cutting a measley 6% from medication reimbursement...WTF??? Everyone wants to talk all the time about how expensive drugs are....but what about that TEE or TTE for the IVDA with endocarditis???


That **** gets me livid.


It's time for the government to take a stand against people who should have been taken out already by Darwin's theory.

And the same goes for employers who provide health insurance for people that have an LDL of 300, but are too lazy for lifestyle modifications.

...IMO...$0.02 deposited

 

[FORTLIVINGROOM]

What you really don't point out as that a 6% reduction in brand name reimbursement would mean the death knell for any independent pharmacy left in the state of Washington.

I get your panties in a bunch for knockin' CVS???



What are you trying to say? Because I think we both know that any policy that resulted in independents going belly-up would be welcome by WAG/CVS.


Let's get back to reality here...the whole issue is the cut in generic reimbursement. How many Medicaid pts do you see on brand name drugs??? Even the pts who request brand will renig after you tell them the price. Given the % of medicaid pts on brand drugs and the money lost if reimbursement for them was cut 6% is not enough by itself to force Walgreens to boycott Medicaid pts.

edit: after checking out the WA website they say their generic rate is only 63%...so the effect if the cut were to "brands only" would have more of an impact than I originally thought. But you get my point...and I know in my pharmacy Medicaid is not 54% brand...no way.

 

[xiphoid2010]

That's what I was wondering...why those 44? Why not all if you're going to make that stand?

An rational explanation would be the rest are located in areas with few or no medicaid recipients, hence profitability is not as much impacted.

 

[xiphoid2010]

Folks: keep in mind how razor thin pharmacy profit margins are.

If you read NACP report, the net operating profit for an independent pharmacy is only 3%. A 6% cut would make them lose money.

Walgreen has the highest profit margin of the large chains and it's less than 2%. CVS and others operate on less than 1% profit margin.

Retail pharmacy is a very low margin business, supported mainly by large volumes.

 

[ItsOverZyvox]

An rational explanation would be the rest are located in areas with few or no medicaid recipients, hence profitability is not as much impacted.

Probably a likely explanation. There's no doubt Wag's think tank sat around to put together a plan. I'm sure they're wagering that these medicaid paitents will not travel far to those Wag's that will accept medicaid. The medicaid volume will shift to other retailers. Unless other giants follow Wag's, this move could forever affect the way congress treats them.

 

[FORTLIVINGROOM]

But are there other issues that maybe I'm too naive to recognize that may negatively affect us (health care workers)?

You can bet special interest groups are going to try and sue Walgreens for discrimination or something along those lines.

"The greedy CEOs are trying to discriminate against poor people"

And because Medicaid pts are generally minorities it will get spun into a race issue...But last I checked, Medicaid eligibility was based on income...not race.

And of course since the RPh's are the face of the pharmacy we'll be seen by pts as the people trying to deny healthcare. Pts already think we're the ones who increase their co-pays.


...another $0.02

 

[xiphoid2010]

You can bet special interest groups are going to try and sue Walgreens for discrimination or something along those lines.

"The greedy CEOs are trying to discriminate against poor people"

And because Medicaid pts are generally minorities it will get spun into a race issue...But last I checked, Medicaid eligibility was based on income...not race.

And of course since the RPh's are the face of the pharmacy we'll be seen by pts as the people trying to deny healthcare. Pts already think we're the ones who increase their co-pays.


...another $0.02

Pretty sure that argument won't fly in a court of law, other wise just about every single business in this country has been discriminating the rural or low income populations for ages. We are a capitalistic nation after all.

 

[Old Timer]

I get your panties in a bunch for knockin' CVS???



What are you trying to say? Because I think we both know that any policy that resulted in independents going belly-up would be welcome by WAG/CVS.


Let's get back to reality here...the whole issue is the cut in generic reimbursement. How many Medicaid pts do you see on brand name drugs??? Even the pts who request brand will renig after you tell them the price. Given the small % of medicaid pts on brand drugs and the money lost if reimbursement for them was cut 6% is not enough to force Walgreens to boycott Medicaid pts.

The brand generic issue you raise is a canard. There are brand medications that do not have a generic. Let's take Advair for example. Let's say Advair has an AWP of 100.00. Let's say the net cost is $80.00 The fee is $2.00 Let's say the state pays AWP-14%. Once you add 6% more and you are at AWP-20%. When you add in the $1.50 you now make a gross profit of $1.50. (1.9% gross margin) Even if the chains get 25% off AWP they would have a gross profit of 8%. How do you expect your employer to pay you 100G's per year on 8% gross margin.

You have no clue about what pharmacy reimbursement is, how it has developed and where it stands now. While the chains may be in competition with independents, they often join forcs to fight these idiotic plans of the politicians to save their asses on the backs of pharmacies.

With each post you show your knowledge of the subject is pitiful.

Your plan works as long as you never dispense:

Advair
Plavix
Singulair
Flovent
Zetia
Lantus
Lidoderm
Actos
Topamax
Aricept
Enbrel
Provigil
Truvada
Atripla
Combivent
Arimadex
Spiriva
Adderall XR
Humalog
Spiriva
Asacol
Avandia
Prograf
Cellcept
Renagel
Restasis
Patanol
Aldara
Epizicom
Gleevec
Avonex
Norvir
Pulmicort
Humira
Tarceva
Viread
Trizivir
Reyataz
Casodex
Premarin
Sustiva
Novolog
Lovenox
Novolog Mix
Betaseron
Evista
Avadamet
Rozerm
Elmiron
Niaspan
Sensipar
Lumigan
Omacor
Serevent
Hepsera
Actoplus Met

These are from the top 300 single source drugs where you really have very little in the way of a generic alternative.

How can you ask someone to dispense something at their net cost?

 

[PumpkinSmasher]

The brand generic issue you raise is a canard. There are brand medications that do not have a generic. Let's take Advair for example. Let's say Advair has an AWP of 100.00. Let's say the net cost is $80.00 The fee is $2.00 Let's say the state pays AWP-14%. Once you add 6% more and you are at AWP-20%. When you add in the $1.50 you now make a gross profit of $1.50. (1.9% gross margin) Even if the chains get 25% off AWP they would have a gross profit of 8%. How do you expect your employer to pay you 100G's per year on 8% gross margin.

You have no clue about what pharmacy reimbursement is, how it has developed and where it stands now. While the chains may be in competition with independents, they often join forcs to fight these idiotic plans of the politicians to save their asses on the backs of pharmacies.

With each post you show your knowledge of the subject is pitiful.

Your plan works as long as you never dispense:

Advair
Plavix
Singulair
Flovent
Zetia
Lantus
Lidoderm
Actos
Topamax
Aricept
Enbrel
Provigil
Truvada
Atripla
Combivent
Arimadex
Spiriva
Adderall XR
Humalog
Spiriva
Asacol
Avandia
Prograf
Cellcept
Renagel
Restasis
Patanol
Aldara
Epizicom
Gleevec
Avonex
Norvir
Pulmicort
Humira
Tarceva
Viread
Trizivir
Reyataz
Casodex
Premarin
Sustiva
Novolog
Lovenox
Novolog Mix
Betaseron
Evista
Avadamet
Rozerm
Elmiron
Niaspan
Sensipar
Lumigan
Omacor
Serevent
Hepsera
Actoplus Met

These are from the top 300 single source drugs where you really have very little in the way of a generic alternative.

How can you ask someone to dispense something at their net cost?

Simmer down, grouchy old man.

 

[ntoriusyaz]

i think the gov should not cover brand name drugs for medicare and medicaid, or at the very least there should be a copay for medicaid and a higher copay for medicare when brand is dispensed.

So many old people on lipitor when any statin will do. or how about nexium! come on people. write for omeprazole. why the hell should the taxpayer foot the bill for he fancy brand name meds when 99 times out of 100 the generics will work just as well.

 

[FORTLIVINGROOM]

So after doing some research here are the reimbursement rates by state as of Dec 2008:

http://www.cms.hhs.gov/Reimbursemen...imbursementInformationbyStateDecember2008.pdf


Here is what WA plans to do:

http://fortress.wa.gov/dshs/maa/pharmacy/

They will reduce the reimbursement from AWP minus 14% to AWP minus 20%. The state guy tries to give the impression that it only applies to brand meds, but according to the official statement it's across the board.

I'm not sure how significant this is when you look at the other states' reimbursement rates. WA doesn't require a co-pay, but the dispensing fee is pretty high.


I know going from AWP -14% to AWP -20% is pretty significant (6 percentage point decr in reimbursement = 43% reduction) but how would that compare to the other states??? Any "oldtimers" wanna school the rookie?


How would all these differences in either:

1) "Ingredient Cost" (AWP - X%, or WAC + X%)

2) "Dispensing Fee"

or

3) "Co-pay"

Affect the bottomline?



Because states like CO have a reimbursement of AWP - 35%.

 

[FORTLIVINGROOM]

With each post you show your knowledge of the subject is pitiful.

Hey, geriatric, I never said I was an expert...just throwing opinions out there. You apparently have all the answers so teach us young'uns.


1/4 of those drugs you listed have a generic med in the same class or with a similar MOA that could be used. It may not be the BEST Tx...but if I was getting free meds I'd be happy I got anything. And if a med is truly necessary they get a PA.


I refuse to be brain-washed by PHARMA that there is NO alternative to brand meds. Last I checked the US still has pretty poor outcomes compared to other developed nations' healthcare...so what have all these brands accomplished???



Anyways, I'm on the same side as you. I want RPh's to get reimbursed for their work.


But back to the whole issue we were arguing about...I believe reducing the re-imbursement for brands ONLY is an effective way to incentivize utilization of generics.

NACDS made the claim that reduced generic reimbursement would incentivize pharmacies to dispense brands. Well then, keep the generics reimbursement the same or increase it....while reducing it for brands. Force the pt to pay if the pt requests brand...make the pt pay a higher co-pay if the MD writes for brand...so the pt as well as the pharmacy is bugging the MD to write for generic.




MEANWHILE....let every mofo know about OTHER reasons for skyrocketing costs...

Citing work done by the Center for Studying Health System Change, the article noted that from 2000 to 2005 the use CT scans in the U.S. rose from 12 scans per 100 people to 22-with each test generating between $500-$1000 in revenue. During that same period, Medicare's spending on imaging services nearly doubled from $6.4 billion to $12.0 billion, accounting for 23 percent of total outpatient hospital payments in 2005, according to MedPAC-Congress's advisory committee on Medicare.
Concerns are not just about the costs, but also the quality and value of the imaging services. Growth in CT scans—which expose the body to much more radiation than X-rays—has led some doctors to conclude that the amount of radiation exposure may actually increase the rates of cancer in future years (subscription required). Insurers have responded to the growth in imaging by requiring precertification before ordering new studies, much to the chagrin of some doctors and radiologists,
The problem is that no one can distinguish necessary from unnecessary imaging and all the financial incentives in medicine are for over-performance of imaging. One-third of medical malpractice suits are for failure to diagnose, so if a doctor has the slightest question about whether a symptom heralds something serious, an imaging study is ordered. The care of an individual patient is highly disorganized because patients are cared for by multiple doctors who rarely know what the other has done. Unless a single doctor is coordinating or managing the care of a patient—which is rare—duplicate studies are commonplace. Another factor is that no one measures the quality of a doctor's practice and without standards of performance who is to know necessary from gratuitous imaging? Even when there are standards for performance, such as in coronary angiography, the evidence is overwhelming that those standards are not followed with any regularity. Furthermore, in an effort to increase income, doctors have increasingly installed imaging units in their office rather than referring patients to radiology facilities for studies, further escalating the problem of unneeded studies.

And all the disparities in the medical field...PCP's who do the grunt work making as much as Rph's while specialists are making 3X as much as either.

 

[Aznfarmerboi]

Hey, geriatric, I never said I was an expert...just throwing opinions out there. You apparently have all the answers so teach us young'uns.


1/4 of those drugs you listed have a generic med in the same class or with a similar MOA that could be used. It may not be the BEST Tx...but if I was getting free meds I'd be happy I got anything. And if a med is truly necessary they get a PA.


I refuse to be brain-washed by PHARMA that there is NO alternative to brand meds. Last I checked the US still has pretty poor outcomes compared to other developed nations' healthcare...so what have all these brands accomplished???



Anyways, I'm on the same side as you. I want RPh's to get reimbursed for their work.


But back to the whole issue we were arguing about...I believe reducing the re-imbursement for brands ONLY is an effective way to incentivize utilization of generics.

NACDS made the claim that reduced generic reimbursement would incentivize pharmacies to dispense brands. Well then, keep the generics reimbursement the same or increase it....while reducing it for brands. Force the pt to pay if the pt requests brand...make the pt pay a higher co-pay if the MD writes for brand...so the pt as well as the pharmacy is bugging the MD to write for generic.




MEANWHILE....let every mofo know about OTHER reasons for skyrocketing costs...










And all the disparities in the medical field...PCP's who do the grunt work making as much as Rph's while specialists are making 3X as much as either.

You do understand that reducing brand's reembursement rate has nothing to do with increasing utilization of generic drugs? No pharmacist in their right mind will call a physician to change from one drug to another when it is covered by the insurance.

 

[Old Timer]

Ok, here is your history lesson...........

Once upon a time, deep deep in the pharmacy before the evil insurance industry destroyed the profession there was a price of a medication called A.W.P.. The AWP was the Average Wholesale Price. The AWP was published in one of two books,

The Red Book

and the Blue Book.
There were monthly supplements for new items and price changes.
Pharmacies actually paid AWP. In other words, there was a correlation between AWP and the price a pharmacy actually pays.

Some time in the late 60's or early 70's pharmacies began to negotiate better terms with their suppliers based on volume and prompt payment. It was not uncommon to get AWP-10% from your wholesaler. You could buy direct from the manufacturer and get 20% off (Merck, Upjohn, Ciba, Pfizer, etc). You could purchase deals at 30-35% off of AWP if you stocked up enough.
Along comes third parties and they offer the Pharmacy AWP + $2.00 or AWP+$2.50. Now at the time, the average price of a prescription was around $20.00. So lets say you sold 100 Aldomet 250mg and the AWP was $10.00. If you bought it direct from Merck, you paid $8.00. You would be paid $12.00 from the insurance company and you would have a 33% gross margin.

Now as time goes on, pharmacies are able to negotiate even better deals with their suppliers as volumes rise. Despite the run away inflation of the 80's, the dispensing fee is rarely raised.

Once the drug companies start massively increasing prices in the late 80's and early 90's, the PBM's need to get money from somewhere so they start with reducing the amount they pay from AWP to AWP - some percent. It started out as 5% and is now as hig has 18%. The "dispensing" fee has never had a correlation to what it cost to dispense a prescription, but who cares what the formula is as long as the total price is acceptable.

Now, Generics are another kettle of fish. The AWP has no relation to the cost. You can have an AWP of $70.00 per 100 and and an acquisition cost of $12.00 per 100. So 35% off of AWP will be fine for some generics and not others. New generics that hit the market do not have such a wide spread between AWP and actual cost, so under this formula they would be sold at a loss.

It's a balance. The problem is everyone (the payors) is bitching on the cost side without recognizing the dispensing fee is also out of whack. I have no trouble cutting my cost to the bone, if I am fairly compensated for my time. Again who cares what the formula is as long as you make money on the total package.

This also dove tails nicely with the exodus of independent pharmacies from the scene in 90's. This had everything to do with declining reimbursement and very little to do with Walgreens and CVS.

Now the government is shocked to find that pharmacies are gouging the public on generic drugs using the formula that they themselves devised. If you took acid, you would not have a more bizarre experience....

You don't understand how bad it is right now. Again, this will be bad for anybody who practices in a retail setting. The chains can just survive it better. But it affects their bottom line and if you loose money, you can't make it up in volume....

 

[MountainPharmD]

This is what it is going to take. The chains run our profession now. They need to stand up and refuse to accept unreasonable reimbursement. It is the only way things will change. I would like to see them do this with Medicare patients as well. I think half of the brand name drugs I dispense to Medicare patients I do at a loss.

For example look what happened when the government was going to cut Medicare reimbursement to physicians by 10.6%. Some of the largest physician groups in the county said they would no longer accept new Medicare patients. In Topeka Kansas the Cotton-O'Neil clinic is one of the oldest and largest in town. They put up signs at all thier locations that said, "Due to recent government cuts in Medicare reimbursement we will no longer be accepting new Medicare patients." Congress called a special session to override the presidents veto and delay the cuts for 18 months.

I say good for Walgreens. Doesn't make any sense to dispense drugs at a loss.

 

[MountainPharmD]

Ok, here is your history lesson...........

This also dove tails nicely with the exodus of independent pharmacies from the scene in 90's. This had everything to do with declining reimbursement and very little to do with Walgreens and CVS.

Now the government is shocked to find that pharmacies are gouging the public on generic drugs using the formula that they themselves devised. If you took acid, you would not have a more bizarre experience....

You don't understand how bad it is right now. Again, this will be bad for anybody who practices in a retail setting. The chains can just survive it better. But it affects their bottom line and if you loose money, you can't make it up in volume....

It is very bad right now, I agree.

I do not agree that Walgreens and CVS had nothing to do with it. I do not think they directly had anything to do with it. By virtue of thier size they were better able to survive than your average idependant. So indirectly they contributed to the problem and the contiuing decline by thier inaction. You can only make up so much by increasing volume. I think we are now seeing the point where even Walgreens and CVS have had enough.

 

[ItsOverZyvox]

if you loose money, you can't make it up in volume....

You mean you can't make up loss by doing more volume at loss??

 

[Aznfarmerboi]

This is what it is going to take. The chains run our profession now. They need to stand up and refuse to accept unreasonable reimbursement. It is the only way things will change. I would like to see them do this with Medicare patients as well. I think half of the brand name drugs I dispense to Medicare patients I do at a loss.

For example look what happened when the government was going to cut Medicare reimbursement to physicians by 10.6%. Some of the largest physician groups in the county said they would no longer accept new Medicare patients. In Topeka Kansas the Cotton-O’Neil clinic is one of the oldest and largest in town. They put up signs at all thier locations that said, "Due to recent government cuts in Medicare reimbursement we will no longer be accepting new Medicare patients." Congress called a special session to override the presidents veto and delay the cuts for 18 months.

I say good for Walgreens. Doesn’t make any sense to dispense drugs at a loss.

Most of it is at a loss once you add in corporate waste. In NYS, we have to waiver a patient's copay for medicaid if they cannot afford to pay. Once you add that in, we are pretty much either break even point for brand or losing money. They dont reemburse a lot for generics either but we make it up with volume.

 

[MountainPharmD]

You mean you can't make up loss by doing more volume at loss??

Z....Whats the data on the radient barrier. Were you able to calculate how much money you saved?

 

[aboveliquidice]

I think it is a good thing (standing, in any form, against decreased reimbursement)... I can also understand the knee jerk reaction to do this to Medicare as well - but I think that would be a disaster for public opinion.

Cut off the poor - you can maybe argue the "handout" viewpoint
Cut off the grandparents - you are committing social suicide

It will be interesting to see how this one plays out. Any chance that others will follow suit in Wa???

 

[Doctor M]

]Reducing reimbursement for brand meds is reasonable[/B], and these large chains like Walgreens/CVS switch pts. to generic whenever possible.

But cutting reimbursement on generics? This will be interesting...maybe Obama will fire the CEO of Walgreens???

That doesnt make any sense. Why is that reasonable? Do you realize what 6% reduction would mean? Do you think pharmacies make this huge profit on brand name drugs?? Let alone independent pharmacies? A bottle of plavix costs us like $125 for a bottle of 30. Most PBM's reimburse $140 including the dispensing fee. $15 gross profit, like 12%. Not much room to work with. So in my eyes, it does not make sense to CUT brand name drugs.

 

[Doctor M]

Simmer down, grouchy old man.

Id have to agree with oldtimer here. Pharmacy reimbursement is important to understand if you want to survive. Single source brand reimbursement will gross you 10-15% gross if that. a 6% percent cut is drastic. Take singulair, avg reimbursement is $105, but cost is around $95-$99 per 30 pills. Pretty crappy. You can do the math.

 

[xiphoid2010]

the bottom line: love AWP, fear AMP. The end.

 

[Doctor M]

So after doing some research here are the reimbursement rates by state as of Dec 2008:

http://www.cms.hhs.gov/Reimbursemen...imbursementInformationbyStateDecember2008.pdf


Here is what WA plans to do:

http://fortress.wa.gov/dshs/maa/pharmacy/

They will reduce the reimbursement from AWP minus 14% to AWP minus 20%. The state guy tries to give the impression that it only applies to brand meds, but according to the official statement it's across the board.

I'm not sure how significant this is when you look at the other states' reimbursement rates. WA doesn't require a co-pay, but the dispensing fee is pretty high.


I know going from AWP -14% to AWP -20% is pretty significant (6 percentage point decr in reimbursement = 43% reduction) but how would that compare to the other states??? Any "oldtimers" wanna school the rookie?


How would all these differences in either:

1) "Ingredient Cost" (AWP - X%, or WAC + X%)

2) "Dispensing Fee"

or

3) "Co-pay"

Affect the bottomline?



Because states like CO have a reimbursement of AWP - 35%.

AWP-35% is for generic drugs. Generic drugs is a whole different ball game. A bottle of amlodipine 10 mg, #30 is reimbursed usually at $4 or $5 including $4.23 fee in florida. AWP is $54 for 30 tabs. So you can see how AWP - 35% for generics is pretty good. $54-18.9 = $35.10 for 30 tabs. CO also has MAC pricing ( I believe Maximum allowable cost). In florida, Medicaid had MAC on oxycontin at $600, regardless of the number of tablets. So if you dispensed 120 tablets of oxy 80 mg, the state would reimburse $600. Problem is, the cost of oxy 80 #100 tablets was way more than MAC.

 

[Doctor M]

i think the gov should not cover brand name drugs for medicare and medicaid, or at the very least there should be a copay for medicaid and a higher copay for medicare when brand is dispensed.

So many old people on lipitor when any statin will do. or how about nexium! come on people. write for omeprazole. why the hell should the taxpayer foot the bill for he fancy brand name meds when 99 times out of 100 the generics will work just as well.

You need to realize that state governments have "deals' with manufactures. Nexium is covered but omeprazole is not because the manufacture will pay the state a "kickback" for having nexium on the formulary. In florida, nexium is no longer covered, but prevacid is. Brand Lamictal, Brand Depakote were covered under the state florida program because the manufactures pay the states. For example, say Brand Lamictal AWP is $100 for 30 tabs. Well, the state will pay the pharmacy AWP-13% (CO). That means they will pay the pharmacy $87 for brand name lamictal. The Manufacture in turn will send the state a rebate for $X amount of dollars. If you notice, the price of brand Lamictal and generic are not that far off (AWP). So it probably behoves the state to cover brand name because it actually costs them less for the brand than the generic.

 

[Doctor M]

the bottom line: love AWP, fear AMP. The end.

Amen!

 

[meister]

It's time for the government to take a stand against people who should have been taken out already by Darwin's theory.

Are you a sociopath?

And because Medicaid pts are generally minorities it will get spun into a race issue...But last I checked, Medicaid eligibility was based on income...not race.

Oh, you're just a ******ed bigot.

 

[ItsOverZyvox]

Z....Whats the data on the radient barrier. Were you able to calculate how much money you saved?

I think my calculation last year showed I would break even in 3 to 4 years. Now, if you do it yourself for $500... it will pay for itself over this summer no doubt. My house felt a lot more comfortable last summer. But it was littel colder in the winter because my attic didn't get as warm due to the barrier.

 

[FORTLIVINGROOM]

UPDATE

TACOMA — A federal judge in Tacoma has temporarily blocked Washington state's plan to reduce Medicaid prescription drug reimbursement rates.
U.S. District Judge Robert Bryan ruled Tuesday that the plan — which had been scheduled to take effect Wednesday — failed to meet federal procedural requirements and would be unfair to pharmacies.
The plan would save the state money by making Washington's reimbursement rate the lowest in the nation. Pharmacy groups oppose it, saying it would cut their profit margins dramatically. Walgreen Co. has announced 44 of its stores in Washington would stop filling Medicaid prescriptions, and Bartell Drugs said it would stop accepting new Medicaid patients for prescription services.
The judge set a hearing for April 9 on whether to continue to block the plan.

It'll be interesting to see which other pharmacies follow suit as well as who stays behind to try and pick up the extra business...CVS?

AWP-35% is for generic drugs. Generic drugs is a whole different ball game. A bottle of amlodipine 10 mg, #30 is reimbursed usually at $4 or $5 including $4.23 fee in florida. AWP is $54 for 30 tabs. So you can see how AWP - 35% for generics is pretty good. $54-18.9 = $35.10 for 30 tabs. CO also has MAC pricing ( I believe Maximum allowable cost). In florida, Medicaid had MAC on oxycontin at $600, regardless of the number of tablets. So if you dispensed 120 tablets of oxy 80 mg, the state would reimburse $600. Problem is, the cost of oxy 80 #100 tablets was way more than MAC.

So then what's the deal with the WAC???

Are you a sociopath?

I'm all about providing healthcare to the elderly, mentally and physically disabled, pregnant women and children; people who need it.

I'm not about providing FREE care to people like the one used in my example that you conveniently edited out.

So, you wouldn't give a second thought to treating an IVDA who is HIV positive and ALREADY has had a valve replaced who still continues to inject and has another veg on TEE???

Case in point, chump:

The rate of IE recurrence in HIV-infected patients has not been well-characterized. Our study demonstrates a high 1-year recurrence rate (16%). Of these, 44% recurred with the same organism. Although 7 patients left the hospital against medical advice before completion of antibiotic treatment, only 1 of those patients experienced a recurrence; therefore, this does not fully explain the high recurrence rate. An alternative explanation for the high recurrence rate is that many patients continued to use illicit drugs after their first IE event. Of those alive at 1 year, 20 (66%) were actively using drugs and 4 (13%) were in drug treatment.

http://cme.medscape.com/viewarticle/549119_4

I imagine most "tax-paying" Americans would want to see their money RATIONED and used on patients who would truly benefit from Medicaid. I bet most Americans and politicians would be pissed if they knew their money was being WASTED by Medicaid patients who show up in the ER for a refill on their narcs.

So save your bleeding heart and think about how 100s of children in poverty could have received immunizations with the money WASTED on a a drug addicts prosthetic valve surgery.

Maybe this will help: "Law, Legitimacy and the Rationing of Health Care"

Oh, you're just a ******ed bigot.

Thanks for the refresher in healthcare disparities. Maybe you should write a letter to the WA legislature?

 

[meister]

I'm all about providing healthcare to the elderly, mentally and physically disabled, pregnant women and children; people who need it.

Except for obese people, IV drug users, HIV+ patients, and minorities, right? Because those are the groups you've successfully maligned in your incoherent rants.

So, you wouldn't give a second thought to treating an IVDA who is HIV positive and ALREADY has had a valve replaced who still continues to inject and has another veg on TEE???

You're right, we should think twice before treating certain types of people!

I imagine most "tax-paying" Americans would want to see their money RATIONED and used on patients who would truly benefit from Medicaid. I bet most Americans and politicians would be pissed if they knew their money was being WASTED by Medicaid patients who show up in the ER for a refill on their narcs.

The solution to HIV and drug use is to discontinue their medical care so that they all die off!

Thanks for the refresher in healthcare disparities. Maybe you should write a letter to the WA legislature?

Maybe you should stop with the incessant verbal diarrhea and realize that you have been saying stupid things this entire thread. You said "Medicaid patients are generally minorities" which is 100% incorrect. All you have done here is expose your own personal bigotry and biases. Are you a college republican?

 

[Vitamin K]

They announced today that they're suspending the reimbursement cuts for the time being due to lawsuits and boycotts.

 

[MountainPharmD]

They announced today that they're suspending the reimbursement cuts for the time being due to lawsuits and boycotts.

Spineless cowards....

 

[Doctor M]

UPDATE



It'll be interesting to see which other pharmacies follow suit as well as who stays behind to try and pick up the extra business...CVS?





So then what's the deal with the WAC???




:

WAC is what the wholesaler supposedly acquires the drugs at from the manufacture, the Wholesale Acquisition Cost. A wholesaler will typically sell to you at WAC - a certain percentage. For example, a given wholesaler will sell you a bottle of Plavix 75 mg #30 at WAC - 2.75%. Say the WAC is $135, so they will sell you the product at $131.29. Remember that wholesalers get rebates from manufactures, so their actual WAC is never really known. Now, ins companies will reimburse you at AWP - 15% for single source brands, therefore, AWP = $159, therefore you get reimbursed $135.15. Barely a profit. For Generics, reimbursement is much better, say AWP -35%. For exmaple Alendronate WAC is $2.50 for #4 tabs. Ins may reimburse AWP-35%, or $49.99-17.50 = $32.59. Not a bad profit. So you see how important it is to pick a good wholesaler. And that is WAC...

 

[Doctor M]

Ok, here is your history lesson...........

Once upon a time, deep deep in the pharmacy before the evil insurance industry destroyed the profession there was a price of a medication called A.W.P.. The AWP was the Average Wholesale Price. The AWP was published in one of two books,

The Red Book

and the Blue Book.
There were monthly supplements for new items and price changes.
Pharmacies actually paid AWP. In other words, there was a correlation between AWP and the price a pharmacy actually pays.

Some time in the late 60's or early 70's pharmacies began to negotiate better terms with their suppliers based on volume and prompt payment. It was not uncommon to get AWP-10% from your wholesaler. You could buy direct from the manufacturer and get 20% off (Merck, Upjohn, Ciba, Pfizer, etc). You could purchase deals at 30-35% off of AWP if you stocked up enough.
Along comes third parties and they offer the Pharmacy AWP + $2.00 or AWP+$2.50. Now at the time, the average price of a prescription was around $20.00. So lets say you sold 100 Aldomet 250mg and the AWP was $10.00. If you bought it direct from Merck, you paid $8.00. You would be paid $12.00 from the insurance company and you would have a 33% gross margin.

Now as time goes on, pharmacies are able to negotiate even better deals with their suppliers as volumes rise. Despite the run away inflation of the 80's, the dispensing fee is rarely raised.

Once the drug companies start massively increasing prices in the late 80's and early 90's, the PBM's need to get money from somewhere so they start with reducing the amount they pay from AWP to AWP - some percent. It started out as 5% and is now as hig has 18%. The "dispensing" fee has never had a correlation to what it cost to dispense a prescription, but who cares what the formula is as long as the total price is acceptable.

Now, Generics are another kettle of fish. The AWP has no relation to the cost. You can have an AWP of $70.00 per 100 and and an acquisition cost of $12.00 per 100. So 35% off of AWP will be fine for some generics and not others. New generics that hit the market do not have such a wide spread between AWP and actual cost, so under this formula they would be sold at a loss.

It's a balance. The problem is everyone (the payors) is bitching on the cost side without recognizing the dispensing fee is also out of whack. I have no trouble cutting my cost to the bone, if I am fairly compensated for my time. Again who cares what the formula is as long as you make money on the total package.

This also dove tails nicely with the exodus of independent pharmacies from the scene in 90's. This had everything to do with declining reimbursement and very little to do with Walgreens and CVS.

Now the government is shocked to find that pharmacies are gouging the public on generic drugs using the formula that they themselves devised. If you took acid, you would not have a more bizarre experience....

You don't understand how bad it is right now. Again, this will be bad for anybody who practices in a retail setting. The chains can just survive it better. But it affects their bottom line and if you loose money, you can't make it up in volume....

I concur will all...

 

[solzont]

I never thought I'd be saying this....but GO WALGREENS! I work with several community pharmacists and, as it is, they lose money filling some scripts These are good people and outstanding pharmacists who do right by their patients, work very hard, and go the extra mile...my heart goes out to them. Year by year, community pharmacies seem to be going the way of the "local" hardware store...shame indeed.

 

[farmist]

An rational explanation would be the rest are located in areas with few or no medicaid recipients, hence profitability is not as much impacted.

If they were it would not make much difference why accept it at all. It's a publicity stunt.

It's my understanding that Commifornia (Medical) is worse and you lose $50-100 dispensing pricey brand names (newer antiphychotics and AIDS meds).

 

[FORTLIVINGROOM]

Quote:
Originally Posted by FORTLIVINGROOM
I'm all about providing healthcare to the elderly, mentally and physically disabled, pregnant women and children; people who need it.

Except for obese people, IV drug users, HIV+ patients, and minorities, right? Because those are the groups you've successfully maligned in your incoherent rants.

I never said don't provide healthcare to minorities. The only thing I mentioned about minorities was that they make up a greater proportion of Medicaid patients. Which is a fact. Don't like facts? Go out and change the world grasshopper.

Since when has honesty become synonomous with bigotry?

Quote:
Originally Posted by FORTLIVINGROOM
So, you wouldn't give a second thought to treating an IVDA who is HIV positive and ALREADY has had a valve replaced who still continues to inject and has another veg on TEE???

You're right, we should think twice before treating certain types of people!

Quote:
Originally Posted by FORTLIVINGROOM
I imagine most "tax-paying" Americans would want to see their money RATIONED and used on patients who would truly benefit from Medicaid. I bet most Americans and politicians would be pissed if they knew their money was being WASTED by Medicaid patients who show up in the ER for a refill on their narcs.

The solution to HIV and drug use is to discontinue their medical care so that they all die off!

Don't make broad characterizations of my generalizations, ya hear!?!?

Obviously, it's not fair to cut off all people with a certain disease from healthcare coverage, Medicaid or otherwise. However, there are always instances of ignorance. For instance, the HIV pt who leaves AMA and returns with bacteremia after continued injections. I'm not trying to single out a certain group ...there are all kinds of examples of waste...think up your own.


Now, of course there are alternatives that should be explored like rehabilitation...but how many AMA and failed therapies before we say, "You're cut off!"?

My point with obesity is employers and insurers should incentivize pts to pursue lifestyle changes before moving on to meds or surgeries. Medicaid pts shouldn't be the only ones who have to take responsibility for their behavior. It should apply to those with employer-sponsored coverage also. Do you think self-employed pts who pay for their own insurance policies are more, or less likely to be proactive in their healthcare as compared to pts with Medicaid or employer-sponsored coverage???

Of the self-employed people I know...most of them forgo typical healthcare coverage and simply get a bare-nuts policy or catastrophic coverage because they maintain their hygiene, exercise, and eat healthy.

But for the rest there should be mechanisms to encourage healthy living...for instance...you have hypercholesterolemia and you start at weight X....so we will give you simvastatin. If you get to weight X-5% you get X% off your co-pay...and if you get to weight X-10%...you get X% off your co-pay.....vs.....now you have simvastatin so you can still eat whatever the **** ur fat ass pleases.

Quote:
Originally Posted by FORTLIVINGROOM
Thanks for the refresher in healthcare disparities. Maybe you should write a letter to the WA legislature?

Maybe you should stop with the incessant verbal diarrhea and realize
that you have been saying stupid things this entire thread. You said "Medicaid patients are generally minorities" which is 100% incorrect. All you have done here is expose your own personal bigotry and biases. Are you a college republican?

I'm sorry, I meant to say:

Most Medicaid pts are minorities.

That is not to say whites don't make up a significant portion of MEdicaid patients. However, when you compare the rates of those on Medicare as compared to that race's respective percentage of the general population, the proportions are much higher for hispanics and African Americans than for Caucasians. The reasons for that are complicated and way beyond the scope of my rants, but they're the facts whether you like them or not. I'm not saying it's Hispanic or AA peoples fault...but it IS a fact. In my area, the population around the main pharmacy I work is largely Medicaid pts who are white.

PS...I voted for Obama and wrote a couple op-eds supporting him...he is half-white you know

j/k Lighten up a little...ur taking this a little too personal.

I have nothing against poor people...I am one. I grew up on the fringe of poverty and know many people who are on Medicaid. My point has been there are those who are too ignorant to appreciate the care they receive or too lazy to take a proactive role in their healthcare. I don't have the luxury of free healthcare from the state...and I would be lying to you if I said I'm not a little bitter towards people who take advantage of the systems in place to help them...like dealing with mothers smoking in the drive-thru while they get pissed that it's gonna take an extra minute for their pre-natal vitamin Rx. Or the guy on Medicaid who refuses to pay his $1 co-pays while simultaneously wanting me to ring up his groceries.



So save your self-righteous proclamations and red-herring replies for another time....or you can continue to try and insult me for stating the facts about the demographics of Medicaid pts.

 

[genesis09]

Walgreens threatened to do this in Illinois a few years ago, and the state stopped the proposed cuts.

 

[type b pharmD]

that is freakin nuts that the state bowed down to them like that. good for walgreens i say, again! here's a move that just saved some jobs

 

[ItsOverZyvox]

that is freakin nuts that the state bowed down to them like that. good for walgreens i say, again! here's a move that just saved some jobs

Politicians mismanage state money and then their solution is for local businesses to pay for their mishandling of state money? Wags should be applauded for this move as they won the bluff.

After all, those politicians don't want to be labeled as the one responsible for outcry of public who believe their representative took away the drug benefits.