New Jersey's Medicaid Choice: Cut Benefits for Patients or Overpayments to Independent Drugstores

News provided by

Pharmaceutical Care Management Association

Jun 15, 2011, 12:28 ET

New Ad Campaign: New Jersey Medicaid Pays More than Medicare, Fortune 500 Companies for Prescription Drugs

WASHINGTON, June 15, 2011 /PRNewswire-USNewswire/ -- A new ad campaign launched today highlights the clear choice New Jersey policymakers have in finding savings for the state's Medicaid program: cut benefits for patients or overpayments to independent drugstores. New Jersey could save $249 million over the next decade by cutting independent drugstore overpayments and modernizing its pharmacy benefits to be more like those in Medicare and commercial plans.

Click here to view ad

"New Jersey taxpayers shouldn't pay more for Medicaid drug benefits than Fortune 500 companies and Medicare," said Pharmaceutical Care Management Association (PCMA) President and CEO Mark Merritt. "Currently, the program uses fewer generic drugs and pays drugstores almost double the fees that Medicare or private insurers pay. Over the next decade, New Jersey could save $249 million – without cutting benefits or payments to doctors and hospitals – by modernizing the program's pharmacy benefits."

Transitioning to a more efficient and affordable pharmacy benefit model would save states across the country billions without limiting access the National Center for Policy Analysis (NCPA) announced in a new white paper, "Increasing the Cost-Effectiveness of Medicaid Drug Programs."

New Jersey Medicaid pays too much for prescription drugs because the program uses an archaic, fee-for-service approach in which state officials set payment rates and are therefore constantly lobbied to inflate them by special interests like pharmacists. To avoid this trap, most non-Medicaid drug benefits programs – like those offered by Medicare, employers and unions – rely upon independent, third party pharmacy benefit experts to negotiate competitive rates with pharmacies. These programs also reduce costs by employing cutting-edge, market-proven strategies to increase the use of generics. Polling finds voters would rather modernize Medicaid pharmacy than cut benefits for patients or payments to doctors and hospitals.

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. The independent drugstore lobby's own economic report found that 400 new stores opened last year amidst what was a very profitable year for the industry despite the economic downturn.

PCMA represents the nation's pharmacy benefit managers (PBMs), which improve
affordability and quality of care through the use of electronic prescribing (e-prescribing),
generic alternatives, mail-service pharmacies, and other innovative tools for 200-plus million Americans.

Follow PCMA on Twitter

SOURCE Pharmaceutical Care Management Association