State Medicaid Programs Pay Higher Prescription Drug Prices, GAO Report Finds
State Medicaid programs pay more for prescription drugs than many companies, hospitals and the Department of Veterans Affairs, according to a Government Accountability Office report released on Wednesday, the AP/Las Vegas Sun reports. For the report, GAO investigators reviewed 2003 Medicaid payments for brand-name medications and found that states paid 12% more than prescription drug wholesalers and 36% more than hospitals and other large purchasers. The House and Senate have passed separate budget bills that would revise the formula that states use to pay pharmacists when they dispense medications to Medicaid beneficiaries, but differences between the bills remain unresolved. CMS Administrator Mark McClellan said, "The GAO report makes clear that the current payment rules result in overpayments for drugs and emphasizes the need for reform." Rep. Joe Barton (R-Texas), chair of the House Energy and Commerce Committee, said, "The government routinely overpays for prescription drugs," adding, "Until we revamp Medicaid's drug purchasing system, we're throwing away money that could be used to treat patients." However, the National Community Pharmacists Association has raised concerns that revisions to the formula could cause pharmacists to lose money when they dispense medications to Medicaid beneficiaries. Charlie Sewell, vice president of government affairs for NCPA, said, "All we're asking for is to cover our expense for dispensing and a small margin for serving this patient base" (Freking, AP/Las Vegas Sun, 11/30). The report is available online. Note: You must have Adobe Acrobat Reader to view the report.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.