News From the
Committee on Small Business
Nydia M. Velázquez, Chairwoman

For Immediate Release
July 18, 2007   

CONTACT: Kate Gilman/Erin Donar,  (202) 225-4038

Committee Criticizes Rule for Jeopardizing Small Pharmacies’ Ability to Provide Care
Medicaid Pharmacy Rule Negatively Impacts Community Pharmacies

WASHINGTON – The Centers for Medicare and Medicaid Services’ (CMS) new rule will drastically affect the ability of community pharmacies to participate in the Medicaid program, and provide prescription drugs in their communities. Today, the House Committee on Small Business discussed how the proposal will impact small pharmacies, and ways to mitigate the effects on local drug stores and the communities they serve.    

“These new rules will have serious consequences for privately owned pharmacies, as well as the people who depend on these businesses for their medical supplies and prescriptions,” said Chairwoman Nydia M. Velázquez. “There are currently over 53 million people that depend on Medicaid.  Under this new rule, their access to lifesaving medicines is seriously threatened.”

Almost half of all Americans get their prescription medicines from independently owned pharmacies. These services are particularly vital in rural areas. Seventy-five percent of independently owned pharmacies are in rural communities.  The threat of losing these drug stores could have drastic impacts on rural neighborhoods nationwide that rely on them as their main source for receiving medications.  While the negative implications on small pharmacies are clear, large drug manufacturers will barely be affected by the regulation.  It is the small companies that will bear the weight of the CMS rule, leaving their larger counterparts to continue on with business as usual, as communities across the country are adversely affected.     

“It is clear that CMS failed to take into account the domino effect that this new rule will have on small pharmacies and the communities they serve,” said Chairwoman Velázquez. “Once again it is our nation’s small businesses that are being forced to carry the sole burden of a proposal such as this one.  This is not right – we will be working to ensure that CMS assesses the impact on small pharmacies – a simple, yet critical, step that CMS has failed to do.”  

At the hearing, committee members strongly rejected CMS’s proposal and highlighted the negative implications it is has for small pharmacies.   They discussed a number of possible solutions that would reduce the impact, including a more equitable distribution of costs, and focusing economic analysis only on pharmacists in order to provide a more accurate assessment of the impact.  Members also explored ways to encourage CMS to exert greater oversight of the drug market in an attempt to avoid these types of consequences in the future.  These are all methods that would reduce the effect this rule will have on the nation’s community pharmacists. 

“Despite the fact that there will be a number of negative repercussions for this nation’s community pharmacists, CMS continues to push this rule forward,” said Chairwoman Velázquez.  “It is clear that steps can, and need, to be taken that will not only mitigate the effect on local drug stores, but also ensure communities nationwide have ample access to prescription medications,” said Chairwoman Velázquez.

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