Bill would let Kentucky take over Medicaid pharmacy benefits

Kentucky state Sen. Max Wise (R) says community pharmacies in his rural district are in danger of closing, in part because of low reimbursement rates from Medicaid. He notes the joint state and federal Medicaid program spent $1.68 billion on pharmacy benefits last year, with about $1 billion going to pharmacies while the rest went to PBMs.

Kentucky state Sen. Max Wise (R) says community pharmacies in his rural district are in danger of closing, in part because of low reimbursement rates from Medicaid. He notes the joint state and federal Medicaid program spent $1.68 billion on pharmacy benefits last year, with about $1 billion going to pharmacies while the rest went to PBMs. A state Senate committee approved a bill on February 14 that would take that money from PBMs and give it to the state to administer its own pharmacy benefits program. Wise says, "[PBMs] currently set all the rules with little to no government oversight. As a state senator, taxpayer, I don't think that's right." Kentucky is one of 26 states that uses managed care organizations to oversee their Medicaid programs, but seven of them have opted to administer pharmacy benefits themselves. West Virginia recently carved out its pharmacy benefits through an administrative decision, and similar discussions are happening in Ohio and Arkansas, says Shannon Pratt Stiglitz, vice president of government affairs for the Kentucky Retail Federation. Kentucky's Medicaid commissioner, Stephen Miller, warns that for every dollar the state increases the minimum dispensing fee paid to pharmacies, it would take $6 million of state money to fund it. "It's the cost of doing that that becomes a real hurdle," Miller notes.