Pharmacies across the state are bracing for a blow to their revenues. Starting Friday, Medi-Cal --the state’s health coverage for low-income patients -- will start paying 10 percent less for filling certain prescriptions. Though the number of drugs affected is less than originally outlined, pharmacists are still worried.
Many of them say there is a misconception that they make loads of money selling drugs. But after they pay pharmaceutical companies for the medications they stock, there’s little profit left, they say. An additional cut could put them in the red on some drugs.
“The margin in drug products is roughly 2 to 4 percent,” says Jon Roth, CEO of the California Pharmacists’ Association. “If you’re looking at a 10 percent reduction, you’re immediately upside down and dispensing medication at a loss.”
Some pharmacies said they would simply stop carrying certain drugs rather than take the hit. Advocates had worried that patients wouldn’t be able to get expensive medications for cancer, HIV, or mental health conditions.
So the state stepped in and created a list of 2,600 drugs that are now exempt from the cuts - about 60 percent of all drugs reimbursed in a given month. However, the state still plans to "clawback" -- or retroactively collect -- payments on the remaining drugs dating back to June 2011, when the cuts were first signed into law.