Massachusetts Pharmacies Protest Medicaid Reimbursements, Shift New Tax to Consumers

Independent pharmacy owners in Massachusetts are concerned that low Medicaid reimbursement rates may "squeeze" them from the market, the Springfield Union-News reports. The state reduced Medicaid reimbursements to pharmacies by 4% last year, and small pharmacies say the cut impacts their finances "more than it seems." Concerned Pharmacists, a coalition formed by 36 independent pharmacies in the state, plans to lobby state lawmakers about the funding situation. Monty Schwartz, who owns Shoppers Drugs in Springfield and organized the group, said that independent pharmacies offer specialty services, such as compounding, that some chain stores do not. "How do you cut services to make up for the reduction in payments by Medicaid and still care for all those people?" he said. State Rep. Joseph Wagner (D) said the cut was not meant to adversely impact pharmacists, noting that according to federal reports, states often overpay pharmacies, which often receive discounts from drug companies. He added that Walgreens, Brooks and CVS, the three main chain drug stores in the state, have not disclosed how much they pay for drugs, making it difficult to assess the situation accurately (Norris, Springfield Union-News, 1/8).

Pharmacy Tax Reviewed
In related news, Wagner has requested that state Attorney General Thomas Reilly (D) investigate whether pharmacies are breaking the law by passing on to customers a $1.30 "pharmacy assessment tax" that took effect Jan. 1. Wagner said the tax was intended for pharmacies, not patients. The Union-News reports that many CVS stores are displaying placards that read: "Under a new law ... we are required to collect a $1.30 pharmacy tax. Because no prescription insurance plan intends to pay for this tax on behalf of its beneficiaries, the $1.30 will be collected from customers." The tax was levied as part of legislation designed to generate $36 million annually for drug costs under MassHealth, the state's Medicaid program. The legislation authorizing the tax also increased Medicaid copayments for prescription drugs from 50 cents to $2 per prescription. While the attorney general's office is "look[ing] into" the situation, Wagner said he plans to file legislation that would prohibit pharmacies from charging customers the tax. However, state Rep. Benjamin Swan (D) said that pharmacy customers should "share" financial responsibility for the tax, the Union-News reports (Zajac, Springfield Union-News, 1/7).