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Our Pharmacies At Risk


By Isela Ocegueda

El Pasoans on Medicaid may face new problems getting their prescriptions filled.  That’s because Texas lawmakers recently enacted legislation that transferred the management of prescription drugs of more than 3 million Texans on Medicaid from the State of Texas to private health maintenance organizations and prescription benefit managers.  This new state law took effect on March 1, 2012, and it could potentially cause severe, negative impacts on local, independent pharmacies and their customers.

The purpose of this legislation was to help address a $27 billion budget shortfall in Texas, and because Medicaid is one of the state’s largest expenses, some lawmakers felt that an overhaul of the Medicaid system was needed.  As a result, managed care companies have drastically reduced the reimbursement fees for filling Medicaid prescriptions by 80%, and this has severely impacted many independent pharmacies, especially those that serve low-income communities with high numbers of Medicaid patients.

Since this transition to pharmacy- managed care took effect on March 1, several independent pharmacies across Texas have either closed their doors for business or have decided that they can no longer afford to fill Medicaid prescriptions.  But how has it impacted El Paso’s pharmacies and what should Medicaid patients expect as this legislation is carried out on a long-term basis? 

Because El Paso has such a large Medicaid population, the impacts of this legislation could be far-reaching.  Naomi R. Gonzalez, member of the Texas House of Representatives, is very concerned about the potential effects of this new law and explains that “the reality of the situation is that when you live along the border and when you live in under-medically served areas, this type of policy affects independent pharmacies.  When you’re an independent pharmacist and you live along the border, and in particular El Paso, your bread and butter really is Medicaid/Medicare, and if you’re not getting reimbursed at a rate that’s going to help you to at least break even, then that’s going to cause problems.” 

These problems are more pronounced for locally owned, independent pharmacies than for major chain pharmacies like Walgreens or CVS for a few reasons.  Independent pharmacies may primarily serve Medicaid/Medicare patients and thus feel the cuts more sharply, while chain pharmacies have other kinds of private pay and insurance reimbursements that can cover the losses that this kind of legislation will present.  Also, independent pharmacies tend to focus their sales mainly on medications, while chains (especially pharmacies located inside stores) offer many other kinds of products for sale.  Fernando Ahumada, pharmacy manager at Walgreens at 10600 Montana, says that other than the change of Medicaid from one single plan to now many different plans, and the confusion that the change often causes, they have not noticed much of an impact as result of this legislation.

It’s a different story for other pharmacies across the state that have had to close their doors because this law caused them such financial hardship that it no longer became feasible to stay in business.  In El Paso, Freeway Pharmacy recently closed its doors for business, though it’s not clear if it was directly because of this new policy.  Some of Freeway Pharmacy’s clients made their way over to The Medicine Shoppe, a locally owned, independent pharmacy with two locations.  Martha Mosher, owner and pharmacist of The Medicine Shoppe, while glad to be of service to such clients, is also very concerned about the state of the independent pharmacy in El Paso, including her own.  Ms. Mosher will soon be moving her store on Arizona Avenue, where she’s been for 10 years, to a district that offers more affordable rent rates.  Her pharmacy has also had to cut all discretionary spending in order to conserve financial resources.  She feels that the primary concern is “access to pharmaceutical care.  Pharmacies are going to have to assess whether they can service these [Medicaid] patients with the low reimbursement.  I think there will be more closures of independent pharmacies.”

While Medicaid patients may have to undergo the inconvenience of looking for another pharmacy to fill their prescriptions, they may also have to experience a deterioration in personal service, an even greater issue at stake that is rooted in the unique value that independent pharmacies offer their communities.  State Representative Gonzalez explains that “there’s this feeling that the independent pharmacists do a better job than some of the larger chain pharmacies because they know the patients [and] have add-on services like delivery.”  Ms. Mosher concurs and explains that independent pharmacies offer not only face-to-face counseling about patients’ medication, something that mail-order pharmacies cannot do, but also “more personal service.  Trust is established, it really is, and relationships.  You can’t have that with mass merchandising.”  Thus, this new legislation not only has the potential to hurt the independent pharmacies of Texas, but also its customers, particularly in communities like El Paso that have higher numbers of Medicaid patients.

As Texas lawmakers struggle to find creative and sensible ways to balance the state’s budget, questions arise regarding the consequences of financial policies that inevitably affect its citizens.  Carly Cloud, current president of the El Paso Pharmacy Association, shared her own personal opinion that this legislation will be “harmful to our independents [pharmacies] and we will see it affect us.”  State Representative Gonzalez agrees: “It really is a shame that there was not more thought about the policies that were put into place with regards to independent pharmacies and pharmacies in general.”  After all, these policies ultimately trickle down to the people.  If patients can’t get access to proper pharmaceutical care, then perhaps the cost of those potential consequences might offset the savings that this new law anticipates.  The long-term effects of this legislation still remain to be seen, but the prognosis for independent pharmacies and their patients does not look very promising at this point. 

For more information about this legislation and its impacts, visit the website of Texas TrueCare, an association that represents the interests of independent pharmacies in Texas: http://www.texastruecare.com/.

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