Magazine article Drug Topics

Washington State Charges Pharmacist Price Conspiracy

Magazine article Drug Topics

Washington State Charges Pharmacist Price Conspiracy

Article excerpt

The state of Washington has charged two small-town pharmacists with conspiring to fix prescription drug prices. The charges involve pharmacy reimbursement for Healthy Options, a state program to move the healthiest segments of Washington's Medicaid population into managed care, which began in January 1995.

The state attorney general alleged that Richard Larson, owner of Oroville Pharmacy, and Monte Drummond, owner of Drummond's Drug, conspired to set minimum reimbursement rates for Healthy Options patients and refused to deal with third-party payers that declined to accept their fixed prices.

Larson and Drummond, through their attorneys, insist that they were honestly, openly, and legally trying to negotiate for higher reimbursement rates. Their target was comparability with existing reimbursement rates offered by Medicaid and other programs.

Larson and Drummond own and operate the only pharmacies in Oroville, a rural town of 1,500 near the Canadian border in central Washington. Because the nearest pharmacy is 20 miles away, the state argued, patients and payers had no choice but to accept the artificially high prices.

Neither pharmacist was willing to discuss the case in detail, but attorney Steven Drummond, representing his brother Monte, explained that "the reimbursement offers made to the Drummond pharmacy were substantially less than Medicaid had been paying for the same patients for the same services for years."

Prior to implementation of Healthy Options, the Washington Medicaid program had been paying pharmacists average wholesale price (AWP) minus 11%, plus a dispensing fee of $3. …

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