Bentley could make Walmart lone Medicaid prescription provider

Published 6:09pm Tuesday, November 12, 2013

Local drug stores could see reductions in revenue if Gov. Robert Bentley chooses a primary Medicaid prescription provider.

Bentley signed an executive order earlier in the year, appointing politicians, department chairs, physicians and insurance company representatives to the Alabama Medicaid Pharmacy Study Commission — designed to investigate ways to reduce the state’s cost of Medicaid.

State Sen. Greg Reed, who chairs Senate Health Committee and sits on the commission, said the primary motivation for the commission’s investigation is an exponential increase in Medicaid costs. Since 2008, Medicaid costs have increased from 25 percent of the state’s general fund budget to 36 percent — approximately $615 million.

“We cannot continue to grow at that rate, the expense is too great,” Reed said. “Our task has been given to gather information and examine how we can best distribute Medicaid prescriptions to Medicaid recipients in a cost effective way for the state.”

So far, the commission has heard three presentations — from a pharmacy benefit management program, the Alabama Pharmacy Association and Walmart.

The presentations all placed an emphasis on reducing costs by purchasing in bulk and becoming the primary provider of Medicaid prescriptions.

“Much of the cost saving comes in economies of scale,” Reed said. “It’s no different than a clothing store. A mom and pop clothing store can’t buy at the same cost as a large conglomerate like J.C. Penney.”

But some Selma residents and local pharmacies are wary of the cost-saving methods.

“It’s not fair, there are hundreds of little drugs stores that we all use,” Selma resident Sallie Emerson said. “I don’t think the governor has the right to choose what pharmacy every Medicaid prescription comes from. Would you like to eat at the same place as everyone in town?”

A switch to one, primary provider would reduce profits for local pharmacies, such as Carter Drug Co. in downtown Selma, owner Tim Williamson said.

“We provide services that big chain pharmacies can’t provide,” Williamson said. “We have in-house charge accounts and free delivery. All the money, all the tax money, all the sales tax, everything stays in this community; you won’t see a chain pharmacy with a billboard at a local football game.”

Emerson said free delivery is the most valuable service for many Selma residents.

“Some people don’t have cars or are too sick to drive to the drugs store, so the delivery service is really helpful,” she said.

Commission members won’t have the final say on what group or store is chosen. Instead, the commission will present a full report of all presentations to Bentley in December, spokesman Jeremy King said. The commission will hear a few more presentations before delivering the report, but Walmart’s presentation has already received criticism.

The chain store is proposing that all people living within 10 miles radius use Walmart’s pharmacy. Those living outside of the radius could still use a local drug store, but the local store would have to contract with Walmart.

Walmart doesn’t have to rely on its pharmacy as a primary source of income, Williamson said. On the other hand, he said Carter Drug Co., and many like it, rely primary on prescriptions to generate revenue.

Reed said he isn’t ignoring the economic impact on local, rural pharmacies. He said the commission must consider the total economic impact of any decision that is made.

“When you turn the wheel in one direction, it turns in another; everything is interrelated,” Reed said. “We want to save money, but if we minimize services to make it more difficult for Medicaid recipients to get drugs, we could have a greater expense overall. In very rural communities, many times the local pharmacists are one of the most significant health care providers.”

The next commission meeting will be Thursday, Nov. 14 at 1 p.m. at the Montgomery County Health Department Auditorium. King wasn’t sure how long the decision could take, but said changes would likely take effect in time for the 2015 fiscal year.

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