OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 ↓ (860) 240-0200

http: //www. cga. ct. gov/ofa

sSB-392

AN ACT CONCERNING PHARMACY REIMBURSEMENT.

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 13 $

FY 14 $

Social Services, Dept.

GF - Cost

$4. 7 million

$4. 7 million

Note: GF=General Fund

Municipal Impact: None

Explanation

The bill will cost the Department of Social Services (DSS) approximately $4. 7 million in FY 13 and FY 141. The increased cost to the DSS is due to the following: 1) $3. 4 million as a result of increasing the dispensing fee for independent pharmacies2 from $2 to $4 for prescriptions dispensed to Medicaid recipients and 2) $1. 3 million as a result of decreasing the discount rate for independent pharmacies from average wholesale price (AWP) minus 16% to AWP minus 14% for brand name (legend) prescriptions dispensed to Medicaid recipients.

To the extent the reimbursement differential between chain pharmacies and independent pharmacies is allowed under federal law the cost described above would accrue to the state.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation and the ability of DSS to implement the requirements of the bill.

1 Based on most recent pharmacy claims data from DSS.

2 Independent pharmacies are defined in the bill as being privately owned and having 20 or less stores in the state. The definition of independent pharmacy used to provide claims data may be different than the definition in the bill. The DSS does not collect information on total store ownership. Estimates reflect the best available data for chain versus independent pharmacy claims.