Bartell’s and the Drug War

The Seattle chain cuts its Medicaid losses.

Bartell Drugs’ announcement last week that it’s going to stop filling Medicaid prescriptions at 15 of its 57 stores is the latest salvo in a months-long battle over Washington’s reimbursement rate for Medicaid drugs. The state is betting that enough pharmacies will continue to fill prescriptions—even at a loss—that the government will be able to stand firm.

“[The state] is saying, ‘You keep filling them, so obviously you’re not losing money,'” says Holly Whitcomb Henry, a past president of the National Community Pharmacists Association, who owns three Seattle-area drugstores.

Now Bartell is trying to send a message to the contrary. People on Medicaid, the state-run health-care program for the poor, are caught in the middle.

“I feel horrible about this,” said company CEO George D. Bartell, in an interview with SW.

The stores where he’s cutting off Medicaid drug sales on Feb. 1 are the ones where the company is suffering its biggest losses percentage-wise, he says. You’d think those would be in the poorer parts of town, but the list actually includes some of Seattle and the Eastside’s most affluent neighborhoods—University Village, Magnolia, Bridle Trails (!).

Bartell couldn’t explain precisely why that was, but he says his biggest hit comes from brand-name drugs, not generics, and brand-name drugs may be requested more often at those stores. Henry speculates that some of these stores are located near institutional facilities which house, say, developmentally disabled people who frequently fill a lot of costly prescriptions.

The state is clearly betting that other drugstores won’t join the Bartell boycott. And it’s probably a good bet. Medicaid prescriptions, even sold at a loss, are still a handy way to draw customers—and get them to shell out for heavily marked-up greeting cards, razor blades, and mixed nuts.

So while Bartell’s digs in its heels on the retail front, pharmacy trade groups are turning to court. They’ve filed suit in Washington (and a handful of other states), claiming the government is under obligation to boost its payments. Other states have done so; Washington, New York, Minnesota, and California are holdouts.

The only amusing part of the controversy are the deluded commenters on the Seattle Times and P-I Web sites squawking about how Bartell’s move is exactly what we’ll see under Obamacare. Good luck getting any drugs once the government’s in charge of paying for them!

They have perhaps forgotten that less than two months ago Seattle’s largest hospital, Swedish, said it may stop accepting patients covered by Regence BlueShield, the state’s biggest health insurer—a 100 percent private, free-market entity!—because their reimbursement rates are so crappy.

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