The Pharmaceutical Care Management Association says Florida could reduce its Medicaid prescription drug spending by $462 million.
That estimate comes with PCMA President and CEO Mark Merritt's recent endorsement of Florida Gov. Rick Scott's new Medicaid savings proposal.
"Governor Scott is taking important steps to reduce wasteful spending in Medicaid, which is a big problem when it comesto pharmacy benefits," Merritt said. "Because of its old-school 'fee-for-service' approach, Florida Medicaid pays drugstores much more than either Medicare or the commercial market pays them. Over the next decade, Florida could save $462 million – without cutting benefits, eligibility or payments to doctor and hospitals – simply by updating its approach to pharmacy benefits."
According to Merritt, most state Medicaid programs use a fee-for-service approach in which state officials decide how much to pay Medicaid pharmacies. These officials are in turn lobbied by independent drug stores to set payment levels.
Most non-Medicaid drug benefits programs – like those offered by Medicare, employers and unions – use a different approach. They use private third-party pharmacy benefit experts, who are immune from political pressure, to negotiate rates with pharmacies and improve the use of generic drugs.
Merritt said state Medicaid programs could save millions of dollars over the next decade by managing pharmacy benefits more like state employee plans, Medicare, Medicaid managed care plans and commercial-sector employer plans.
PCMA also issued a statement on Wednesday urging Health and Human Services Secretary Kathleen Sebelius to continue encouraging state Medicaid programs to explore more affordable pharmacy solutions despite opposition from the independent drugstore lobby.
[See advice Sebelius is offering to state Medicaid programs for lowering costs.]
"Medicaid can no longer afford to spend more on pharmacy benefits than Medicare and commercial payers. States should have the flexibility to use the tools other programs use to reduce costs," Merritt said. "State Medicaid programs can no longer afford to pay pharmacies double or triple what other programs pay."
Merritt said research shows consumers have broad access to pharmacy choices in urban, suburban and rural areas, as an average of 21 pharmacies are located and compete near independent pharmacies throughout the United States.
[See more about a PCMA study that could save Medicare billions in pharmacy benefits.]