FINDINGS IN BRIEF

Community pharmacies are a critical access point for health care services

Community pharmacies dispense medications and provide clinical services that improve medication adherence and health outcomes for patients. Limited access to community pharmacies negatively impacts health outcomes.

Access to community pharmacies is changing in Virginia

The total number of community pharmacies operating in Virginia has declined steadily since 2019, leaving 22 localities in the Commonwealth with only one or no community pharmacy within its borders.

Imbalance between pharmacy expenses and revenue is the primary driver of pharmacy closures

Reimbursement rates for dispensing of medications are not sufficient to offset the expense of purchasing, stocking, and dispensing drug products. This loss results in financial pressures that drive pharmacy closures.

States can reduce financial challenges for pharmacies by addressing practices that limit pharmacy revenue

Virginia has placed limits on PBM practices that impact pharmacy revenue and could also establish minimum reimbursement fees for pharmacies when the state is the payer, including within the Commonwealth’s Medicaid program.

States can provide incentives to maintain or re-establish pharmacies in low access communities

Pharmacies in rural communities face unique challenges to sustaining operations, including smaller populations, lower sales volumes, and high rates of Medicaid enrollment. Incentive programs provide direct financial support to select pharmacies or pharmacists meeting certain criteria in limited access areas. Additional funding for government-funded pharmacy services could expand access in areas with no pharmacies.

POLICY OPTIONS IN BRIEF

Option: Submit a budget amendment to set a reimbursement fee floor, including drug ingredient costs and professional dispensing fees, for community pharmacies for all Medicaid members. (Option 1, page 24)

Option: Introduce legislation and submit a budget amendment to establish an incentive program to provide funding for pharmacies operating in localities with low access to community pharmacies. (Option 2, page 27)

Option: Submit a budget amendment to increase funding to the Virginia Association of Free and Charitable Clinics and the Virginia Community Healthcare Association to expand access to pharmacy services provided through free and charitable clinics and community health centers to localities with no operating community pharmacies. (Option 3, page 28)