Massachusetts Pharmacies Reluctant to Comply with State Officials’ Drug Cost Data Request

One independent Massachusetts pharmacy has provided state administrators with drug cost information requested at an Aug. 27 hearing on the state's Medicaid pharmacy reimbursement rate, the Boston Globe reports. Duval's Pharmacy in Whitman submitted invoices and other internal cost data documents that detailed what it paid for 25 drugs listed in the hearing notice. State officials said they asked all Massachusetts drug stores for the cost information because they need to know what pharmacies are paying for drugs in order to set fair reimbursement rates. However, the Globe reports that "pharmacies have been reluctant to release what they consider proprietary information to the public and their competitors" (Mohl, Boston Globe, 8/29). The hearing was prompted by a rate cut approved by acting Gov. Jane Swift (R) on July 29 under the new state budget. Medicaid payments to pharmacies were to be reduced from 10% above the wholesale price to 2% below wholesale. The pharmacy payment cuts were expected to save the state about $60 million a year. In response, the state's three largest drugstore chains, CVS, Walgreens and Brooks Pharmacy, announced that they would no longer participate in the state's Medicaid program unless the state raised the reimbursement rate. Under a temporary measure reached this month, the state agreed to continue to reimburse pharmacies for Medicaid prescriptions at the current rate until Oct. 2, when it will establish a new rate. The agreement also requires pharmacies to give 30 days notice before exiting Medicaid. Wendy Warring, head of the state's Medicaid program, called on the drug stores to provide purchase invoices and other internal cost data to demonstrate how the payment cut would affect them prior to a second hearing scheduled for Sept. 5 (Kaiser Daily Health Policy Report, 8/28). Officials said Duval's drug cost data would be available on a state Web site prior to the hearing.

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Although state Division of Health Care Finance and Policy Commissioner Linda Ruthardt does not "have the legal power" to force the drug stores to offer the information, the state is "attempting to create an environment where as many pharmacies will submit as much data as they can," according to Wyndham Lewis, spokesperson for the state's executive human services office. CVS, Walgreens and Brooks have not said what information they will provide at the hearing, the Globe reports. CVS spokesperson Todd Andrews said, "We're going to be submitting testimony and other documentation and will be doing that in a timely fashion." Carmelo Cinqueonce, vice president of the Massachusetts Pharmacists Association, said he was unsure what information independent pharmacies would offer, adding, "They don't want to divulge their information to competitors. It's very sensitive information" (Boston Globe, 8/29).