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Walgreens to reduce hours in Illinois; Medicaid cuts to blame

Walgreens is planning to discontinue prescription service during evenings and Sundays in 30 Illinois stores as of May 1 because of recent cuts in state Medicaid payments.

The chain originally announced that the plan was to be implemented April 2. The one-month extension came on the heels of a meeting in which Rev. Jesse Jackson; Rev. James Meeks, pastor of Salem Baptist Church; Rep. Jesse Jackson Jr.; and state Rep. Mary Flowers urged Walgreens CEO L. Daniel Jorndt to allow more time to work with Gov. George Ryan and the legislature to resolve the situation.

On Dec. 15, 2000, the state cut the rate paid to community pharmacies by an average of $2.50 per prescription. The Illinois State legislature will be in session through May, and Walgreens is seeking a solution to the reimbursement problem through this period.

The stores with shortened hours will remain open their usual hours for nonpharmacy business, but prescription hours will be 9:00 a.m. to 5:00 p.m., Monday through Saturday. Stores that are open 24 hours a day will remain open.

The company also announced it has put on hold future new store development in neighborhoods with a high population of Medicaid recipients, pending reinstatement of adequate reimbursement.

"We fill 30% of the Medicaid prescriptions in Illinois and virtually all of these stores are losing money," said a spokeswoman for Walgreens. The chain launched a campaign in Illinois to get people to contact their state legislators, urging them to help reinstate reimbursement fees.

Dave Vite, president/CEO, Illinois Retail Merchants Association, told Drug Topics, "We are part of a group of stakeholders working with the governor's office to come up with long-term solutions to the escalating cost of Medicaid. The number of Rxs per recipient has grown by 11% in the last year. The average cost of Rxs has grown $10—nearly 30% over the past two years. The number of recipients in Illinois has grown as a result of an initiative called Kids Care, which has added several hundred thousand new recipients. The least costly part is reimbursement to pharmacists—that has remained stagnant over the past five years. We hope that by streamlining the system—putting in controls similar to other third-party administered pharmacy benefit programs— we'll be able to rein in the costs."

Craig Fuller, president and CEO, National Association of Chain Drug Stores, issued a statement in which he said, "States have begun to reduce costs where they have found the fastest growth—prescription drugs. But choking pharmacy reimbursement to the point where providers must curtail services will do little to reduce rising Medicaid drug costs. In fact, it will only result in harm to Medicaid recipients.... Reducing pharmacy reimbursement is the wrong prescription for controlling Medicaid expenditures."

Walgreens is not the only entity expressing outrage over cuts in state Medicaid payments. One Illinois pharmacy which is close to becoming a casualty of the cuts in Medicaid reimbursement is Valu-Rite Pharmacy in McLeansboro, Ill. Owner Gary Reynolds, who is chairman of the Illinois board of pharmacy, said he is trying to sell his 27-year-old pharmacy. "Hopefully I'm going to be able to sell the pharmacy to someone in better financial shape than we are to keep this pharmacy open for the community," he said.

Sandra Levy

 

Sandra Levy. Walgreens to reduce hours in Illinois; Medicaid cuts to blame. Drug Topics 2001;8:16.