Wisconsin Lawmakers Reduce Proposed Pharmacy Discounts for Medicaid Prescriptions

Wisconsin state lawmakers have "watered down" a provision in the state budget proposed by Gov. Scott McCallum (R) that would have increased the discount that state pharmacies provide on Medicaid prescriptions, despite an August HHS Office of Inspector General report that found states should "demand" that pharmacies provide "deeper" discounts on pharmaceuticals, the Milwaukee Journal Sentinel reports. McCallum's plan would have increased the discount from 10% to 15%, but state pharmacies lobbied state lawmakers to reduce the increased discount to 11.25%. According to the state Legislative Fiscal Bureau, the 11.25% level will cost taxpayers $20 million more than the 15% level over the next two years. The 11.25% discount, retroactive to July 1, will cost pharmacies $5 million more per year than the previous discount, Pharmacy Society of Wisconsin Director Chris Decker said. McCallum spokesperson Tim Roby said that the governor did not veto the 11.25% discount to "at least save some costs." In addition, Roby said that McCallum considers the issue open for "more discussion," adding, "It's too important to stay static" (Manning/Fauber, Milwaukee Journal Sentinel, 9/4). The OIG report found that because states fail to account for discounts pharmacies receive from drug makers, Medicaid programs paid more than $1 billion in 1999 in excessive reimbursements. State Medicaid programs base their payments to pharmacies for brand-name medications on the average wholesale price of a drug "minus a percentage that represents the discounts pharmacies achieve." According to the report, pharmacies received about a 22% discount on AWP from drug makers in 1999, while state Medicaid programs used only about a 10% discount to calculate reimbursements to pharmacies (Kaiser Daily Health Policy Report, 8/31). For further information on state health policy in Wisconsin visit State Health Facts Online.