Walgreen’s has put the State of Washington on notice. Because Washington has not adjusted its Medicaid reimbursements, branded script reimbursement does not cover Walgreens’ costs. Effective April 16, none of the 121 Walgreen’s pharmacies operating in Washington will accept any new Medicaid patients.
“Obviously, we’re disappointed that the alternatives we’ve suggested have failed to achieve a compromise,” said Kermit Crawford, Walgreens Executive VP of Pharmacy. “We intend to continue our commitment to serving our existing patients, but we simply cannot take on additional losses.”
As government intervention and manipulation of the free market continues apace, Word on Health is concerned about the effect this will have on prescription drug manufacturers.
As if the prospect of Government mandated use of generics is not enough to cripple the branded prescription market, if prescription products can be substituted with OTC products paid out of the consumer’s pocket, both third party payers and OTC manufacturers would benefit.
To a large degree major Rx/OTC shifts have already happened for chronic disease therapies, i.e.
- non-sedating anti-histamines (allergy)
- non-steroidal anti-inflammatories (arthritis)
- proton pump inhibitors (reflux)
However, since all chain pharmacies situate the pharmacist at the rear of the store to enhance impulse purchases of OTC products, the decrease in foot traffic from prescriptions could decrease OTC sales too.
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