Independent pharmacists like Richard Carbray are taking it on the chin this year with both the state budget and the union concession package taking a bite out of their business.
Carbray, who owns Apex Pharmacy in Hamden, runs just one of the approximately 170 pharmacies in the state that will lose money based on choices made by lawmakers this year.
At the Capitol Tuesday Carbray said he just calculated the impact the union concession package—which forces 45,000 union employees to order their maintenance drugs by mail—will have on his annual sales. He said he will lose $1 million or 12 to 15 percent of his gross sales from the mail order provision alone.
While that amount of money won’t put him out of business, it may cost him a few employees. And the irony that he is married to a state employee and will no longer be able to fill his own blood pressure medication is not lost on him.
In addition to forcing all state employees to purchase their maintenance drugs for chronic conditions such as high cholesterol and blood pressure or arthritis through mail order the state will be reducing the dispensing fee for all Medicaid patients from $2.90 per prescription to $2 per prescription and it lowers the average wholesale reimbursement of drugs by 2 percent.
“They have articulated that they don’t like it and obviously they wouldn’t,” Gov. Dannel P. Malloy’s Budget Director Ben Barnes said last week.
But he said pharmacists also complain they lose money selling pharmaceuticals to state employees, so he has a hard time understanding where they’re coming from in making the argument they will lose business. The mail order provision in the state employee concession package, which still needs to be ratified, is estimated to save the state $19.8 million in the first year and $20.5 million in the second year of the five year agreement.
There are “extremely low reimbursement rates for state employees, so I can’t believe this will cost undue harm to that industry,” Barnes said.
As for Medicaid, Barnes said only a small percentage of small independent pharmacies are used by that population. He dismissed the notion that the state is giving its business to out-of-state mail order houses. There are three big mail order houses: CVS Caremark of Tennessee, Express Scripts in St. Louis, and Medco of New Jersey.
“The notion that somehow we should not allow any of our business to go to national corporations is pretty unrealistic,” Barnes said.
Malloy himself said Monday that most prescriptions state employees use don’t fall into the maintenance drug category.
“You come down with a cold and have to be treated with an antibiotic, you go get the antibiotic,” Malloy said. He maintained the need to make the contract the state has with its employees sustainable.
But Carbray said that’s not his experience. He said a person who has arthritis isn’t going to wake up one day without arthritis. He said colds and influenza, which require drugs for short periods of time, don’t happen as often as the need for maintenance drugs.
Republicans in the Senate urged their Democratic colleagues to adopt an amendment Tuesday evening which changed the way pharmacists are reimbursed for Medicaid patients.
“Pharmacists get whacked in Malloy’s budget,” Sen. Minority Leader John McKinney said. The savings assumed by the move to reduce the dispensing fee and wholesale price means the state is just giving pharmacists less money. He said instead of reducing their reimbursements the state should be demanding a greater use of generics.
Sen. Toni Harp, D-New Haven, said the use of generics is already at 75 percent when the industry average is around 70 percent. She said Republicans should stop arguing that the Democrats failed to make painful cuts in the budget because this provision is just one of them.
The implementer bill which changes the dispensing rates passed the Senate last Tuesday evening. It now goes to the House.
Click here to read about concerns expressed early in the legislative session by pharmacists.