Something bad happened in California this year. Something very very bad. Something so improperly thought out that it could ONLY happen in California. Something so horrible that it forces you to wonder if the person who came up with this was drunk, stoned, or just an absolute fucking idiot.
I’m of course, talking about the MediCal 10% reimbursement cut. For those not in the Stupidty State, MediCal is our implementation of Medicaid.
Let me back up to explain some stuff before I go on this rant so those not in pharmacy will understand.
You know when I bitch about getting paid $1.50 over my cost of the medication fee? Thats called our dispensing fee. Thats the amount that I make over the cost of the medication that covers my labor, the vials, the power, the tech who fills it, the clerk who has to take your annoying phone call, etc. I’m hesitant to call it a ‘profit’, because in most cases its not. It allows us to stay in business.
Now, back to the rant.
Usual reimbursement from MediCal is our drug cost (give or take a few percent to account for wholesaler markups, etc) plus a dispensing fee of a single digit number (less than 10 bucks for those drunk at home). If I dispense, say, Fukitol, with a ballpark (yet entirely reasonable) price of $200, I can expect to make about $210 bucks. Those slow out there may be saying “HOLY SHIT, YOU GOT $210 BUCKS FOR THAT PRESCRIPTION! PHARMACY IS A GOLD MINE!” For those who think this, go work for the State of California, because you are a fucking retard. Yes, we did get reimbursed by the state a whopping $210 dollars, but unless I can wave a magic wand and make drugs out of thin air, my wholesaler wants $200 out of that $210 so he can pay HIS bills. So I get $10, which really is fucking good.
So California; despite having Silicon Valley, Google, dot.millionaire companies, San Francisco and LA (that combined pay more taxes in one second than we will all make in a lifetime) is broke. Go fucking figure. They decide to whack the MediCal reimbursement for drugs by 10% to stem the bleeding of throwing the baby out with the bath water. This first was voted into effect on June 1st. Us pharmacy and medicine peeps said “HOLY SHIT, YOU CANT DO THIS” and did what Americans typically do, tie it up in the courts (read on and you’ll see why). Well, recently they lost the injunction, so the cuts happened.
Now you may be thinking “gee TAP, 10% cut in your fee isn’t so bad, thats only like a buck”. Therein lies the problem. MediCal didn’t cut our dispensing fee, they cut THE WHOLE FUCKING REIMBURSEMENT.
Quick and Dirty:
Drug costs 200 bucks. We get paid 210 bucks. Take 10% off of that 210 bucks and you’re left with 190 bucks. The drug still fucking costs the pharmacy 200 bucks. We make a whopping -10 dollars. Thats right, the pharmacy LOSES 10 dollars (in this case) with EACH FUCKING HIGH DOLLAR TRADE NAME FILL. Throw in some chemo drugs like Xeloda that costs the pharmacy THOUSANDS or HIV drugs at 600 bucks each, and you have yourself a closed pharmacy.
But no, it gets better. You see, MediCal is in bed with the drug manufacturers. The drug manufacturers give “kickbacks…er..REBATES” to the state to use THEIR product. Why else do you think Nasonex is the ONLY nasal steroid instead of generic Flonase. Why do you think generic Morphine ER isn’t covered, but BRAND ONLY Kadian is? The state is getting a rebate for having these on their formulary.
So not only do we lose money on each brand-name prescription, but we are forced to use brand name for certain drug classes.
See how absolutely fucked this is? So whats a pharmacy to do?
Easy, send the patient somewhere else for brand name drugs. California Business and Profession code prevents the selling of products for less than what it costs you. Its part of the anti-predatory pricing laws.
Does this suck for the MediCal patients who need HIV/Actos/Nexium/Kadian/etc? Yup, it sure does. Our hearts are out to those patients who can’t get their drugs filled, but what other choice do we have? The chains can absorb the cost for a time until they pull the plug, and the independents cant absorb any of that.
Oh no, it doesn’t stop there. You know how I said that the cuts were put into law June 1st but got held up in court? Well they made the cuts retroactive. Pharmacies are going to get a BILL from MediCal for the 10% difference for EVERY FUCKING PRESCRIPTION they filled since June 1st.
If you are an independent store owner, give money to the Pharmacy Defense Fund (if you haven’t already). If you’re a district manager for the chains, get your head out of your ass and tell your people to STOP FILLING BRAND NAME DRUGS or you might be out of a job.
I’ll leave you with that. Don’t send me the bill to cleanup the mess of your head exploding.