LANSING,
MICH.-Pharmacist Daniel E. McNamara, owner of Apothecary Surgical Supply Inc.,
737 North Grand Blvd. in Lansing, Mich., has filed a lawsuit claiming Blue Cross
Blue Shield of Michigan (BCBSM) owes his pharmacy more than $25,000 for violating
its contractual obligations. This is only the first of what the Michigan Pharmacists
Association (MPA) believes will be several lawsuits to be filed against Blue
Cross. The total damages owed to Michigan pharmacies by BCBSM are an estimated
$40 million due to a breach of contract.
The suit
filed Dec. 27 in the Wayne County Circuit Court resulted after an extensive
three-year investigation. The current contract between BCBSM and their pharmacy
providers requires that BCBSM reimburse the pharmacies at the cost of the drug
on the day that it is dispensed.
Since January
1994, BCBSM, the second largest third party pharmacy insurance provider serving
4.8 million patients in the state, has been updating their reimbursement prices
of drugs on a weekly basis, even though wholesale prices often change daily.
The suit claims the untimely updating of drug prices has resulted in a loss
by Michigan pharmacies of approximately $5 million dollars per year of the contract.
"The
breech of the contract between BCBSM and approximately 2,000 community pharmacies
throughout the state is not acceptable and must be addressed," said Larry
Wagenknecht, pharmacist and CEO of the Michigan Pharmacists Association. "The
pharmacies that are suing now and in the near future are demanding that BCBSM
reimburse all pharmacies at the rate specified by their contract."
Over the
past eight years, the pharmaceutical manufacturers have significantly raised
their prices on pharmaceuticals. Every day, pharmacies are notified of a price
increase on one medication or another.
In order
to service their patients, pharmacies order medications from wholesalers-the
distributors between the pharmaceutical manufacturer and the pharmacy-on a daily
basis. The wholesalers charge the pharmacy the cost of the medication on the
day that it is actually delivered. With BCBSM only updating prices weekly, many
times pharmacies are reimbursed at a rate that is less than the cost that they
paid for the medication.
"Pharmacy's
profitability has been declining. The lack of timely updates to medication prices
is one of the leading factors to this decline," Wagenknecht said. "If
this continues, Michigan citizens could see a decrease in access to necessary
and valuable pharmacy services which could ultimately jeopardize patients' health."
Apothecary Surgical Supply is being represented by attorney Jesse Vivian, who is associated with the law firm of Cummings, McClorey, Davis and Acho in Livonia, Mich. He has been in contact with several pharmacies in the state and expects more clients will elect to file lawsuits once they calculate how much is owed to them. "This is a situation that looks like the pharmacy is only losing a few dollars a day and at first blush is not worth pursuing. But when the losses mount day after day, week after week and year after year, the damages become very significant," Vivian said.
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