Citing "new and extreme" cuts in prescription drug reimbursements, Walgreen Co. plans to stop filling Medicaid prescriptions starting July 6 in its 66 Happy Harry’s pharmacies in Delaware.

The drug store chain said the new Medicaid reimbursement rule, which went into effect April 1, is slated to become part of Delaware’s new fiscal budget beginning July 1.

DEERFIELD, Ill. — Citing "new and extreme" cuts in prescription drug reimbursements, Walgreen Co. plans to stop filling Medicaid prescriptions starting July 6 in its 66 Happy Harry’s pharmacies in Delaware.

The drug store chain said the new Medicaid reimbursement rule, which went into effect April 1, is slated to become part of Delaware’s new fiscal budget beginning July 1.

The state reportedly is trimming the reimbursement rate for brand-name prescriptions from 86% of the average wholesale price to 84%.

Walgreens said the cut "will severely impact the ability of pharmacies to fill Medicaid prescriptions in the state" and that the new rule gives Delaware one of the nation’s lowest payment rates for branded and generic drugs. The chain said it’s the state’s largest pharmacy provider.

“We have made the decision, after much thought and care, to end our involvement with the state Medicaid program," Kermit Crawford, senior vice president of pharmacy at Walgreens, said in a statement. "Quite simply, we can’t continue to participate in a program that, in some cases, pays us less than our cost to fill these prescriptions.

"By making it uneconomical for pharmacies to continue filling Medicaid prescriptions, the state’s new payments to pharmacies hurt the very patients that Medicaid is meant to serve," he added.

According to Walgreens, Delaware could close its Medicaid pharmacy budget gap by boosting the generic dispensing rate at the state’s pharmacies. The chain said that it, in conjunction with the National Association of Chain Drug Stores, had approached the state with suggestions of ways to help fill its Medicaid budget gap, but many of those alternatives were rejected.

Cuts in Medicaid have been among the options that state governments have considered in meeting budget shortfalls during the recession. In Washington, Walgreens earlier this year had threatened to stop filling Medicaid prescriptions in some of its pharmacies in the state after it unveiled plans to roll back the reimbursement rate. That matter is now pending amid an ensuing legal battle.