DOVER, Del. — A compromise over pharmacy reimbursement rate cuts allowing Walgreen Co. to continue filling Medicaid prescriptions in Delaware will not be final unless the National Association of Chain Drug Stores withdraws a lawsuit over the matter.

“The state wants to see the industry lawsuit dropped,” says a Walgreens spokesman. “We are just one member [of NACDS], and we don’t control that. However, we are no longer supporting the lawsuit.”

The National Community Pharmacists Association (NCPA) is also a party to the suit, which contends that Delaware violated federal law by ignoring the effect of the cuts on patient access to care.

NACDS is “assessing next steps with our members,” says an association spokeswoman.
At an August 12 court hearing, the judge requested that the two sides report back in two weeks.

“The pharmacy plaintiffs said today that they were giving serious consideration to the proposal that Walgreens has already said is acceptable,” Delaware Health and Social Services Secretary Rita Landgraf said in a statement after the hearing. “The court gave the parties two weeks to resolve their disputes and report back to [the judge]. As the plaintiffs’ attorney conceded, the ball is in the plaintiffs’ court. We look forward to hearing from them.”

Walgreens, which operates 66 Happy Harry’s pharmacies in Delaware, was the only company to publicly fight against the state’s original plan. The chain this month accepted a new reimbursement rate of 85.5% of the average wholesale price, up from the state’s earlier offer of 85%. Delaware said it will glean $250,000 in savings from the 85.5% rate, half of what it would have saved with 85%.

Delaware in the spring cut the rate to 84% from 86% in the face of an $800 million budget gap. Walgreens had said that it would lose money on most branded Medicaid prescriptions under the reduced rate. It said Delaware could save millions of dollars by filling more Medicaid scripts with generic drugs.

The state said it would boost reimbursements for filling certain scripts with generics if the lawsuit is dropped.

Some 160,000 Delaware residents, about one-fifth of the state’s population, get Medicaid benefits.

The state of Washington earlier this year reduced a proposed reimbursement rate cut after Walgreens threatened to stop filling Medicaid prescriptions at 44 pharmacies there.