Comparison of the claim percent gross margin earned by Texas community independent pharmacies for dual-eligible beneficiary claims before and after Medicare Part D

Winegar, Angela L.; Shepherd, Marvin D.; Lawson, Kenneth A.; Richards, Kristin M.
September 2009
Journal of the American Pharmacists Association: JAPhA;Sep/Oct2009, Vol. 49 Issue 5, p617
Academic Journal
Objectives: To describe dual eligibles' claims before and after Medicare Part D and to evaluate the effect that Medicare Part D has had on the claim percent gross margin (CPGM) earned by Texas community independent pharmacies. Design: Nonexperimental time series study. Setting: Texas. October 2005 through September 2006. Participants: 313 community independent pharmacies. Intervention: Review of more than 150,800 Medicaid and 300,000 Medicare Part D claims acquired from a drug claims processor. Main outcome measures: CPGM per prescription claim before and after the implementation of Medicare Part D, controlling for generic/brand drug status. Results: The mean CPGM for prescriptions dispensed before Part D (Medicaid claims) was 26.7%. The mean CPGM for claims dispensed after Part D (Medicare claims) was 17.0% (using ingredient costs in 2006 dollars) or 20.4% (using ingredient costs adjusted to 2005 dollars), a reduction of 36.3% and 23.6%, respectively. Under both Medicaid and Part D, pharmacies earned higher margins for generic drugs (39.9% and 29.5%, respectively) than for brand-name drugs (8.7% and 8.3%, respectively). Conclusion: These results support community pharmacy assertions of lower reimbursements from Part D payers compared with Medicaid payers. Based on these results, pharmacies can respond to this evolving environment by carefully reviewing their Part D plans impact on CPGM and taking available steps in increase the proportion of generic drugs dispensed to Medicare beneficiaries.


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