June 5, 2013
A new report estimates that leveraging additional pharmacy benefit management tools—including greater use of pharmacy networks—could save New York’s Medicaid program $3.7 billion without reducing access or the quality of benefits patients receive, the Pharmaceutical Care Management Association (PCMA) said today.
In 2011, Governor Andrew Cuomo took a step in the right direction by deciding to modernize the state’s Medicaid pharmacy program—a move that has already saved the state $425 million in 2012. However, drugstore lobbyists are attempting to undermine these reforms by preventing the use of preferred pharmacy networks and other proven cost-saving tools. For example, a new state law championed by the drugstore lobby forbids Medicaid plans from using pharmacies that offer more affordable rates on specialty medications.
“Governor Cuomo has taken the first, important steps to modernizing Medicaid pharmacy benefits, but there is much more to be done,” said PCMA President and CEO Mark Merritt. “New York could save $3.7 billion more without cutting benefits by encouraging competition among drugstores. Unfortunately, drugstore lobbyists are undermining these reforms by pushing an alternative agenda that would increase costs for patients and the Medicaid program.”
Components of potential savings for New York include:
- Using limited pharmacy networks: In most state Medicaid programs, every drugstore in the state is entitled to participate. State Medicaid programs could achieve greater savings by using a competitive process and negotiating better discounts from select drugstores that wish to participate in a limited pharmacy network.
- Increasing the use of generic drugs.
- Negotiating market-based pharmacy dispensing fees.
- Encouraging the use of more affordable, preferred brands.
- Reducing drug diversion, polypharmacy, fraud, and waste.