How might the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 affect the financial viability of rural pharmacies? An analysis of preimplementation prescription volume and payment sources in rural and urban areas.
BACKGROUND
Passage of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) has created interest in how the legislation will affect access to prescription drugs among rural beneficiaries. Policy attention has focused to a much lesser degree on the implications of the MMA for the financial viability of rural pharmacies.


OBJECTIVE
This article presents descriptive information on mail-order prescriptions, volume, and payer type of retail prescriptions in rural vs urban areas. Together, these data provide a baseline for evaluating how implementation of the MMA may affect the financial viability of rural independent pharmacies.


METHODS
Projections of prescriptions dispensed from retail and mail-order pharmacies in 2002 for the total US and a sample of 17 states were obtained from IMS Health.


RESULTS
The volume of mail-order prescriptions is small. Rural providers prescribed fewer retail and mail-order prescriptions per person, but more units per person. Rural areas have a higher percentage of prescriptions paid for by cash (18% vs 13%) and Medicaid (16% vs 10%) and a lower percentage of third-party payers than urban areas. Significant variation in volume and payer type exists between states.


CONCLUSIONS
Rural, independent pharmacies may be negatively affected by MMA implementation as business shifts from cash to third-party reimbursement. The high degree of variation between states also has potentially important implications for the implementation of Prescription Drug Plan regions under MMA.
Fraher
Erin P
EP
North Carolina Rural Health Research and Policy Analysis Center, Cecil G. Sheps Center for Health Services Research, University of North Carolina at Chapel Hill, Chapel Hill, NC 27599-7590, USA. erin_fraher@unc.edu
Slifkin
Rebecca T
RT
Smith
Laura
L
Randolph
Randy
R
Rudolf
Matthew
M
Holmes
George M
GM
D003157:Community Pharmacy Services / Q000191:economics* / Q000706:statistics & numerical data; D011307:Drug Prescriptions / Q000191:economics / Q000706:statistics & numerical data*; D006801:Humans; D007356:Insurance, Pharmaceutical Services / Q000331:legislation & jurisprudence*; D006278:Medicare / Q000331:legislation & jurisprudence*; D019035:Rural Health Services / Q000191:economics* / Q000706:statistics & numerical data; D014481:United States; D019037:Urban Health Services / Q000191:economics / Q000706:statistics & numerical data