Walgreens Joins Bartell's in Game of Medicaid Chicken And Seemingly Came to Play

After Feb. 15, don't include Medicaid drugs on your list.
Contrary to media reports (well, ok, my media report) last week, which suggested other pharmacies were unlikely to join local chain Bartell Drugs in abandoning Medicaid prescriptions in Washington, Walgreens is threatening today to do just that.

Walgreens announced it will no longer fill Medicaid prescriptions at 64 of its Washington pharmacies starting Feb. 15. The nice long lead time gives Walgreens what it plainly wants most--not to get out of the business, but to pressure state legislators into boosting drug reimbursement rates for Medicaid, the state health insurance program for the poor.

"We look forward to working with elected officials over the course of the next several weeks to address this important issue," says a Walgreens Senior VP, making plain that this announcement is more like an opening chess move than, say, an irrevocable decision to move plane assembly to South Carolina.

Indeed Walgreens has backed down from similar threats in the past.

Just last year the company said it would stop dispensing Medicaid drugs at 44 of its stores--at a time when, according to at least one expert, Washington's reimbursement rates were the lowest in the country. The company was mollified when the state gave in to demands for higher payments.

Walgreens is taking a tougher stand this time. Those 64 stores account for 75% of the company's Medicaid business in the state, the company says. Compared to Bartell's, which is threatening a shutdown at just 15 of its Seattle-area stores, Walgreens could create an even bigger inconvenience to even more poor patients.

We're going to hazard another forecast and predict that the state will come to the table.

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