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NCPA President's letter in response to Bush accusation that pharmacists are inflating Medicaid drug prices
by James Rankin, RPh
February 15, 2006

The Honorable George W. Bush
President of the United States
1600 Pennsylvania Avenue, NW
Washington, DC 20500

February 14, 2006

Dear President Bush,

The nation’s community pharmacists are offended by your comments last week in Manchester that pharmacists are overcharging the Medicaid system. This statement is disingenuous and untrue. In fact, nearly all Medicaid prescriptions have a cap (“FUL” or “MAC”) placed on them by the Centers for Medicare & Medicaid Services and by the state Medicaid programs designed specifically to make it impossible to “overcharge” the Medicaid system.

The National Community Pharmacists Association represents the nation’s community pharmacists—small businesses where 60,000 health care professionals work and where nearly 400,000 Americans are employed to serve millions of patients each day. Nearly half of community pharmacies are located in towns with populations of less than 20,000.

Over the last week, Congress passed by 216-214 the Budget Reconciliation Act that cut reimbursement to pharmacies by $6.3 billion, and you have asked for an even deeper cut in the 2007 budget, accusing pharmacists of overcharging the Medicaid system. At the same time, Secretary Leavitt praised pharmacies for their “heroic” efforts in holding the implementation of the Medicare Part D prescription drug benefit together. To say pharmacists are bewildered at the paradox of an assault on pharmacists and their patients while at the same time receiving glowing comments from your Secretary of the Department of Health and Human Services is an understatement.

Our members, small business owners who have historically tended to vote Republican, are angry that the President of the United States would impugn their professional reputations. Community pharmacies have continued to provide services to Medicaid patients because their professional obligation to protecting the health and quality of life of these members of our communities, and in spite of relentless cuts in Medicaid reimbursement.

Mr. President, you have created an economic course for pharmacies that seems determined to force these small business owners to close their doors forever, putting thousands out of work and leaving millions of the most vulnerable patients without access to the medications and professional pharmacist services necessary to protect their health and safety. More than one-fourth of the prescriptions dispensed by independent community pharmacies go to Medicaid recipients. While your cuts are detrimental to patients at both chain and independent community pharmacies, 90 percent of independent pharmacy revenue comes from prescription sales, so cuts hit them especially hard. The average pharmacy makes only 2-3 cents on every dollar. Your cuts may erase even this small profit and cause 40 percent of the nation’s independent community pharmacies—10,000 small business pharmacies—to close. The most vulnerable population—the poor, elderly, sick, and children—will lose the ability to conveniently access their medicine.

Even though damage already has been done, you can help family-owned pharmacies stay in business and continue to help patients by making sure that the Average Manufacturer Price—the new basis for pharmacy reimbursement in the Budget Reconciliation Act—is defined to cover what we must pay for the drugs to ensure pharmacies can remain solvent and pay for their electricity, rent, employee salaries, and other business expenses.

If you have any doubts about the economic realities facing family-owned pharmacies, we invite you to visit pharmacists near your home in Crawford, such as Steve Everett, who owns a pharmacy in Waco. He would be pleased to give you a tour, as would pharmacist Dorinda Martin in Dripping Springs, Texas. She would be happy to show you her family’s pharmacy and the services they provide to patients in the Austin area.

First and foremost, independent community pharmacists are health care professionals whose obligation is the health and safety of their patients. They are also small business owners operating in the most competitive segment of the drug delivery system. To characterize these essential health care providers—the most accessible health care professional in the community—as profiteering from the Medicaid program is as ludicrous as it is insulting.

A more accurate characterization of community pharmacists’ contribution to government-sponsored prescription drug benefit programs came from Department of Health and Human Services Secretary Mike Leavitt in his recent statement on the Medicare Part D prescription drug program. In that statement, Secretary Leavitt said:

“The efforts of pharmacists over the last month have been nothing short of heroic. I’ve visited with and heard from pharmacists all over the country. They have been selfless, compassionate, and committed to service. I’ve met pharmacists throughout the country who provided three-to-five day supplies of medicines to beneficiaries without payment—and often no expectation of one—until things could be straightened out. This drug plan is a big change for pharmacists. Many are learning new systems. All are carrying the extra responsibility to help their customers.”
Mr. President, we ask for your apology to the tens of thousands of pharmacist professionals, their employees and families you offended with your remarks in Manchester and to stop the attack on small business. We ask for your commitment to work with community pharmacists to utilize their expertise to reduce health care costs and continue to provide high quality health care to protect the health and safety of Medicaid patients and all Americans.

Sincerely,
James Rankin, RPh
President
National Community Pharmacists Association