Indiana Drops Plans For Medicaid Pharmacy Cuts, To Consider Savings Ideas from Industry

Indiana pharmacists and drugstores dropped a court challenge Nov. 8 against state Medicaid officials after the latter agreed to reverse cuts in pharmacy fees and to "consider cost-savings ideas from the pharmacists," the Indianapolis Star reports (Corcoran, Indianapolis Star, 11/9). Gov. Frank O'Bannon (D) had planned to cut nearly $100 million from the state Medicaid program's $1.15 billion drug budget by cutting from $4 to $3 the fee pharmacists receive for filling Medicaid prescriptions and by "slic[ing]" drug markups by as much as half (Kaiser Daily Health Policy Report, 8/23). However, the governor's plan had faced "repeated court challenges." Most recently, a hearing had been set for Nov. 15 after pharmacies and drugstores "complained" that the cuts violated an earlier court order. With the recent developments, however, that hearing has been postponed "indefinitely." O'Bannon said about $680 million in projected spending must still be cut from the Medicaid program and he "urged cooperation" from providers when cuts from the program are made. William Keown, a lobbyist for Indiana's community pharmacists, said the industry has entered into a "period of extensive talks" with the state (Corcoran, Indianapolis Star, 11/9). For data and other information on health in the states mentioned in today's Kaiser Daily Health Policy Report, visit State Health Facts Online.