NACDS raising alarm over budget cuts as Washington state attacks health costs

ALEXANDRIA, Va. Budget cuts in Washington state to its Medicaid programs have created a “perilous situation” for retail pharmacies and their patients, the National Association of Chain Drug Stores warned on Wednesday, and could “pose danger as a precedent for other states across the nation as well,” according to the group.

NACDS is calling the budget-cutting directive by Washington Gov. Christine Gregoire a “public health and safety threat.” In response, the chain pharmacy group has mobilized a coordinated effort among NACDS members, state association partners and other allies to block the cuts. The source of the alarm: an across-the-board order from Gregoire to all agencies in the state to cut 6.3% from their budgets in order to deal with Washington’s fiscal crisis. The cuts are among a list of fiscal hits to the state’s Medicaid program, run by the Health Recovery Services Administration, and two of them will “directly impact community pharmacies,” according to NACDS.

The cuts will be two-phased. Beginning Jan. 1, 2011, all seniors on the Medicare Part D prescription drug coverage plan “will have to either pay their own co-payments directly to the pharmacy, or the pharmacy will be legally able to deny them prescription drugs and services,” noted NACDS. Washington budget planners estimated the action will save the state $3.2 million.

The state is looking for much greater savings from a second action, scheduled to take effect next spring. Effective March 1, 2011, Gregoire is proposing to kill all Medicaid outpatient prescription drug coverage to adults 21 years of age and older. “This includes fee-for-service, as well as those enrolled in managed care,” NACDS warned its members today. That move will save the state nearly $40 million, according to projections.

In response, NACDS said it is “working with NACDS member companies that serve patients in Washington state, with the Washington State Pharmacy Association and with other allies to develop and implement strategies to confront this situation proactively.” The group is warning policy-makers that cutting subsidies to lower-income patients and those on fixed incomes will produce harmful, higher-cost long-term impacts by denying some patients the preventive health benefits of medicines, reducing adherence and creating the need for more higher-cost emergency care treatments.

“Poor medication adherence lead[s] to $290 billion in annual healthcare costs, or 13% of all healthcare expenditures,” NACDS pointed out in a rapid-action communique to its members. “This action by Washington state – or actions like it elsewhere – can only worsen this situation.”