California Pharmacies Expect Disaster after Loss in Lawsuit Loss to Stop the 10 Percent...

California Pharmacies Expect Disaster after Loss in Lawsuit Loss to Stop the 10 Percent Medi-Cal Provider Cuts

Lawsuit Decision to Impact Medi-Cal Beneficiaries' Access to
Needed Pharmacy Services and Medications
SACRAMENTO, Calif.--(Business Wire)--
Today, a state court denied eight retail pharmacies' motion to
stop the ten percent Medi-Cal provider cuts. The pharmacies sought a
temporary restraining order (TRO) from Sacramento Superior Court
against the California Department of Health Care Services and its
director Sandra Shewry to block the cuts from being implemented. The
court sided with the Department of Health Care Services (DHCS) finding
that the pharmacies had not demonstrated that DHCS had to obtain
federal approval prior to implementing the cuts. The court also found
that the risk of harm presented by the pharmacies was speculative.
Specifically, the court found that:

1.) Only a select number of branded drugs would be reimbursed
below cost;

2.) That it was speculative that the rate cuts would result in
pharmacies operating at a loss; and

3.) That the risk of loss of services to Medi-Cal beneficiaries
overall was speculative. That is, the court determined it was
speculative that the pharmacies would close, lay off workers, reduce
hours and refuse to fill prescriptions.

"We are sorely disappointed with the outcome of this lawsuit,"
said Lynn Rolston, chief executive officer of the California
Pharmacists Association. "However, the fight is far from over. There
are two other lawsuits pending in federal court and we are confident
that we have a strong case to stop the ten percent provider cuts.
Unfortunately, for now, the cuts will be implemented as scheduled,
which could result in tragic consequences for pharmacies and the
patients they serve."

A recent report showed that if the ten percent Medi-Cal provider
cuts are implemented, pharmacies will be faced with tough decisions
including turning away new Medi-Cal beneficiaries, dropping Medi-Cal
altogether or going out of business. Smaller and rural pharmacies will
be hardest hit, forcing other pharmacies to pick up a larger portion
of the Medi-Cal population, which they may not be prepared to do. As
part of the domino effect, these other pharmacies will feel the strain
and might cope with reduced revenue in other ways, such as cutting
staff and hours, which would mean longer lines and slower service for
everyone.

The eight pharmacies, including Farmacia Remedios, Inc., Ross
Valley Pharmacy, South Sacramento Pharmacy, Horton and Converse
Pharmacies, Zweber Apothecary, Komoto Pharmacy and Medical Pharmacy,
Pucci's Leader Pharmacy and Gregg's Pharmacy vowed to continue the
fight to seek a preliminary and permanent injunction against the ten
percent Medi-Cal provider cuts.

for California Pharmacists Association
Bill Bradley, 916-658-0144
bill@perrycom.com

Copyright Business Wire 2008