New York Pharmacists Go Postal on Medicaid Drug Policies

ALBANY, N.Y. – The Pharmacists Society of the State of New York (PSSNY) and several pharmacies have filed a legal challenge in State Supreme Court against state Medicaid policies that force certain beneficiaries to receive some of their medications by mail.  Pharmacists charge that blocking access to local pharmacies and the additional support they  routinely provide violates state laws that explicitly prohibit mandatory mail order in both Medicaid and private health insurance plans regulated by the state.

At issue is a list of expensive medications that are prescribed for Medicaid beneficiaries who have serious medical conditions and that require careful handling and storage, in some cases also requiring use within a strict therapeutic timeframe.  The individuals impacted by the policy are among the most vulnerable who rely on Medicaid for all of their healthcare.    Pharmacists argue that local pharmacies are in a better position to handle and dispense these medications safely and that face-to-face interaction with patients provides an overlooked therapeutic value.  The policy being  challenged allows prescription benefit managers under contact with managed care plans to enroll high-risk Medicaid consumers into “Specialty Pharmacy” programs that have no local option and are mandatory.  The “specialty” pharmacies under contract today with Medicaid managed care plans inNew Yorkare located in other states. Most are subsidiaries of the prescription benefit mangers.  Medications are delivered by common carriers.

The multi-complaint lawsuit charges that in implementing current Medicaid law, the New York’s Department of Health overstepped the statutory authority it has to create a restricted network of pharmacy providers for certain medications based on ‘clinical’ and ‘professional’ criteria, language intended to assure access to medications that could be accessed through limited distribution arrangements made by manufacturers.

“Under this policy hundreds of millions of taxpayer dollars that pay for the Medicaid program are going to out-of-state pharmacies.  Medicaid patients lose choice and access, in-state pharmacies lose prescription volume, andNew Yorkstate loses the tax revenues it needs, “ statedCraigBurridge, Executive Director of the Pharmacists Society of the State ofNew York.  “It’s a money-grab by the nation’s largest Prescription Benefit Managers who are building prescription volume on pharmacies they own and control.”

Pharmacists are in the unique position to know first-hand the impact this policy has had on Medicaid patients they know from their community.  In fact, Medicaid managed care plans slowly began to implement “specialty pharmacy” programs in the last quarter of 2011 as the Medicaid pharmacy benefit moved into managed care away from fee-for-service.  “It’s been a nightmare,” stated Selignt to establish ‘professional and clinical’ criteria for medications that would be available only through restricted pharmacy networks, the suit charges that the criteria developed by the department are overly broad and designed to allow what prescription benefit managers already had in place.

In developing the criteria and the list of medications to be excluded from local pharmacies, the Department provided opportunity for feedback from stakeholders, including PSSNY. “Our comments were solicited, sent in on time and then for the most part ignored,” stated Burridge.  “The medications now being excluded from local pharmacies are widely available through pharmacy wholesalers registered with the Education Department.  Local pharmacies have been dispensing these to Medicaid patients for years.  Overnight they became ‘specialty’ medications, a designation created by business interests and not by the Food and Drug Administration.”


The lawsuit claims that the policy places patients at risk and they will continue to be at risk because of problems inherent in mail delivery. It asserts class action claims on behalf on the millions of Medicaid patients who could be adversely affected and seeks a stay of implementation of the program.  For some patients a single missed dose, a delay in therapy, or medications that are improperly handled or stored can cause therapy failure and poor clinical outcome.   “Patients complain to their pharmacists that they receive little or no communication from remote pharmacies.  They are worried about how safe the medications are when they are not properly refrigerated.  Packages are delivered late or not at all.  If the courier requires a signature, the package will be returned to warehouses if the patient or caregiver is not at home. Packages are left in hallways in apartment buildings,” continued Burridge.

“In the end, this court challenge is more about patients than about pharmacists.”

PSSNY, the named pharmacists  and the Class plaintiffs are being represented by Hiscock & Barclay LLP inAlbany,LindaJ.ClarkandJosephA.Murphy, Counsel.

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