Medicaid Cuts May Be Death Knell for Many Community Pharmacies
Alexandria, Va. - According to the National Community Pharmacists Association (NCPA), an analysis from the Government Accountability Office revealed that a new formula for reimbursing pharmacies that serve Medicaid recipients will result in pharmacists losing, on average, 36% on every Medicaid prescription they fill. According to NCPA Executive Vice president and CEO Bruce Roberts, the Centers for Medicare & Medicaid Services (CMS) "is effectively putting community pharmacies out of the Medicaid business." Although Medicaid is a state-administered health program for the nation's poor and disabled, the CMS is a federal organization that is implementing a new congressionally mandated formula for the maximum amount states may pay pharmacies in order to continue receiving federal matching funds. Roberts said that NCPA cannot support a system "that penalizes pharmacists for participating in the program. Patients that can least afford it will lose access to the pharmacy services they need."

FTC Gives Caremark/CVS Merger the Green Light
Nashville, TN - Caremark and CVS cleared a potentially deal-breaking roadblock when the FTC declared the two companies can proceed with their proposed merger. Caremark sent a letter to its shareholders detailing the compelling strategic and financial benefits of the merger. In it, Caremark reiterated its belief that the combined companies will deliver immediate and concrete value to shareholders. The letter says the merger with CVS "is the most effective way to address the rapidly changing dynamics of the pharmaceutical services industry... and [will] significantly improve the delivery of pharmaceutical services" and differentiate the merged company from its competitors.

Drug Importation Could Threaten Canada's Drug Supply
Ottawa, Canada - The introduction of a bulk-import bill in the U.S. could have catastrophic effects on Canada's drug supply system for months. Canadian pharmacists and patients' groups have called for the Canadian government to introduce a ban on the export of bulk and retail prescription drugs. An independent study by the University of Austin shows that Canada's current drug supply would last for only 38 days if Americans were allowed to buy Canadian medicine in bulk.

Out-of-Pocket Spending on Health Care Increases
Washington, D.C . -A report in Health Affairs shows that even though U.S. health care spending increased 6.9% to almost $2 trillion (or $6,697 per person) in 2005, the health care portion of gross domestic product was 16.0%, only 0.1% higher than in 2004. This represents the third consecutive year of slower health care growth largely driven by prescription drug expenditures. Spending for hospital, physician, and clinical services remained virtually unchanged. However, despite the slowdown in spending, the share of household personal income spent on health care rose from 5.4% in 2001, to 6% in 2005. Out-of-pocket spending for health care increased from $224.5 billion in 2003, to 235.8 billion in 2005. While the bulk of this increase came from hospital, physician, and clinical services expenditures, prescription drug payments, which accounted for 20.4% of the total spend, were the largest component.