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July 22, 2019

7/10/2019 11:35:00 AM
Rural pharmacies to receive state financial help
Capitol News Illinois

SPRINGFIELD - Independent pharmacies that serve Medicaid patients in small communities in Illinois  will soon start receiving additional payments from the state.

The Department of Healthcare and Family Services confirmed Monday that it has begun implementing a program lawmakers established in 2018 known as the Critical Access Care Pharmacy Program, which provides up to $10 million a year in additional reimbursements for independent, brick and mortar pharmacies located in counties with fewer than 50,000 people.

Under the program, qualifying pharmacies receive quarterly payments from the state, based on the number of prescriptions they fill that are reimbursed by the state's Medicaid program.

A spokesperson for DHFS said Monday the agency does not have data reflecting how many Illinois pharmacies qualify for the program.

The program was included as part of the budget package that lawmakers approved during the 2018 session.

It was funded for a second year in the budget that took effect July 1.

"This administration worked aggressively to launch this vital program as rapidly as possible, and we are pleased to help support local pharmacies that are so often critical to our members and to communities throughout Illinois," said John Hoffman, DHFS director of communications and public affairs.

State Sen. Andy Manar, D-Bunker Hill, who pushed for funding of the program, said in a statement Monday that the program is intended to help small, independent pharmacies in small towns stay in business.

"This funding is going to be a major boost for rural pharmacies and will help keep them open while we find ways to combat the rising cost of prescription drugs," he said. "I'm glad to see that we're finally leaving the gridlock of the past behind and bringing this needed program to communities that are at risk of losing their local pharmacies."

Manar was the lead Senate sponsor of another bill this year, House Bill 465, that he said is intended to help independent pharmacies compete with larger retail chain pharmacies. That bill, which passed both chambers and is awaiting Gov. J.B. Pritzker's signature, would bring pharmacy benefit managers, or PBMs, under regulation by the Illinois Department of Insurance.

PBMs are companies that negotiate drug prices on behalf of health insurance plans, often resulting in steep discounts that only large chain pharmacies can afford to provide.

Lawmakers considered several other bills this session that were aimed at addressing the rising cost of prescription drugs, none of which made it through the General Assembly.

House Bill 2880, sponsored by Rep. Will Guzzardi, D-Chicago, would have imposed a tax on prescription drugs whenever their prices rose more than the rate of inflation. It was never reported out of its committee.

House Bill 3493, also sponsored by Guzzardi, would have established a state board to regulate prescription drug prices in Illinois. It also failed to come out of committee.

House Bill 156, sponsored by Rep. Mary Flowers, D-Chicago, would have required insurance companies to report certain prescription drug pricing and spending information to the Department of Public Health. It passed out of the House but died in the Senate.

And House Bill 1441, filed by Rep. Anna Moeller, D-Elgin, would have authorized a program through which the state of Illinois could import prescription drugs from licensed, regulated Canadian suppliers. The bill stalled in its committee.

Advocates warn that if HB 3479 fails, many pharmacies will be forced to lay off employees or close in coming months.

"It's a really unfairly balanced law," Chad Harmon of Harmon's Health Mart said of the current Medicaid reimbursement. "It's going to make a big impact on independent pharmacies in the state of Illinois."

Harmon's has seen reimbursements drop from $6 to $8 to less than $1. Larger chain drug stores, such as CVS, are reimbursed at a different rate, however. Those companies oppose the House bill.

If things don't change, he added, some independent pharmacies may close. The situation is not so dire for Harmon's, but the local business could be forced to reduce its payroll, either by cutting hours or cutting employees.

Bertram's Pharmacy in Robinson is facing a similar dilemma. According to pharmacist Andy Corn, Bertram's is being reimbursed at or below what it costs the store to sell prescriptions.

Many of the state's 500 independent and small-chain drug stores are also receiving less than the "acquisition cost," or wholesale price, of the medicines they dispense to Medicaid patients.

"It's not a sustainable business model," Corn said.

Besides the price of the medicine itself, the store has to pay salaries and utilities. Even the familiar brown plastic pill bottles cost pharmacies money.

If the bill does not become law, Bertram's may have to cut hours or employees, or eliminate services such as free delivery, Corn explained.

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