Drugstores Group Sues Delaware Over Medicaid Cutbacks

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Walgreen Co.'s member organization in Delaware has "filed a suit against the state to put a stop to Medicaid rate cuts" just one week after "Walgreens announced it will stop filling prescriptions of brand-name medications for patients on Medicaid" in Delaware, the News Journal reports. The lawsuit was filed in U.S. District Court by the National Community Pharmacists Association and the National Association of Chain Drug Stores, whose members include Rite Aid, CVS, Wal-Mart and Target, in addition to Walgreens. The groups say "the new rates will lead to more pharmacies closing their doors to Medicaid clients. Gov. Jack Markell, D-Del., "said in a statement that the suit will not intimidate his administration into paying Walgreens higher reimbursement rates."

A similar suit was filed in Washington state after the government announced a plan to cut reimbursement rates for brand-name prescriptions. The state "renegotiated a different rate" after a federal judge "temporarily suspended the plan" (Ratnayake, 6/12).

Meanwhile, Time reports that "in the past decade, more and more pharmacies like CVS and Walgreens, supermarkets such as Kroger and Publix and big-box stores like Wal-Mart have made space for clinics that treat minor ailments, administer vaccines and examine kids who need medical forms to enroll in camp." The retail health clinics often provide cheap treatment for the uninsured and quick service for those who can't get an appointment with a regular physician. The clinics are also money-makers for the drug stores. "Doctors have emerged as the biggest critics of the new trend, because they fear that patients will visit clinics for the treatment of minor ailments, a major source of doctor revenue, and they "will be left with only complicated cases that yield less profit." "In 2007, the American Medical Association called for an investigation into retail clinics, arguing that the drugstores, which position clinics directly adjacent to pharmacies, have a conflict of interest" (Pickert, 6/11).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

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