Bush's efforts to rein in government spending places a dangerous target on health care

Feb 4 2008

President George W. Bush today submitted his budget proposal to Congress for fiscal year 2009. In response Bruce Roberts, RPh, executive vice president and CEO of the National Community Pharmacists Association (NCPA) issued the following statement:

“President Bush’s efforts to rein in government spending places a dangerous target on health care, and even more specifically the Medicare and Medicaid programs. While fiscal restraint is important and necessary, programs to support this nation’s elderly and impoverished should be preserved, especially in the area of Medicaid generic prescription drug reimbursements.

“A patient’s medical needs don’t diminish just because their community pharmacy is threatened. In underserved rural and urban communities these patients lack options other than expensive emergency rooms and doctors’ offices. The proposed savings are fictional. If adopted, the health care costs would actually rise because community pharmacies would not be there for their patients.

“We urge Congress to reject, as it has the last two years, this ill-advised gutting of Medicaid. We also hope the Democrat and Republican nominees for President will make sure to include policies in their health care proposals that do not hurt the small business -- community pharmacy owners -- that so ably serve their patients on the front lines of America’s health care system.”

Background

For the third year in a row President Bush has sought to limit the Federal Upper Limit (FUL) pharmacies receive for participating in this program that provides economically disadvantaged Americans with their medication needs. The number has been reduced from 250% to 150% of Average Manufacturer price (AMP). This reduction significantly limits the ability of small business owners to serve their communities and patients. The Government Accountability Office has already calculated that a FUL reimbursement set at a maximum 250 percent of AMP will lead to reimbursements falling 36 percent below acquisition costs. Using a reduced 150 percent figure will likely cause reimbursement to fall more than 50 percent below the costs of the drugs themselves, without even considering the costs to dispense drugs.

In a recent report, Stephen W. Schondelmeyer, PharmD, PhD, director of the PRIME Institute at the University of Minnesota, provided dire warnings about the effects of the previously adopted Medicaid cuts that have been put on hold pending the results of litigation. Dr. Schondelmeyer indicated the retail pharmacy industry could see a loss of 10,000-12,000 pharmacies. The President’s newest proposal only exacerbates the situation. While any small business owner will tell you that running a business based on these numbers is ruinous, the true victim of this policy will be the patient whose access to prescription drugs will be limited.

The National Community Pharmacists Association, founded in 1898, represents the nation’s community pharmacists, including the owners of more than 23,000 pharmacies. The nation’s independent pharmacies, independent pharmacy franchises, and independent chains dispense nearly half of the nation's retail prescription medicines.