SEATTLE -- Walgreens has told state officials that as of April 16, it no longer will fill prescriptions for new Medicaid patients at its 121 Washington pharmacies because it isn't being reimbursed enough by the state.

In a news release, the Deerfield, Ill.-based drugstore chain said it will continue to serve its existing Medicaid patients, but it can't take on additional losses due to reductions in the state's payments.

Walgreens had planned to stop filling Medicaid prescriptions in February at 64 of its stores in Washington, but held off while negotiations with the state Department of Social and Health Services continued.

The chain said the state reimburses it at less than its cost to break even on nearly 95 percent of brand name medications it dispenses to Medicaid patients.

"Obviously, we're disappointed that the alternatives we've suggested have failed to achieve a compromise," said Kermit Crawford, Walgreens executive vice president of pharmacy. "We intend to continue our commitment to serving our existing patients, but we simply cannot take on additional losses."

Last month, Bartell Drugs stopped taking new Medicaid patients at all 57 of its stores in Washington, though it still fills prescriptions for existing Medicaid customers at all but 15 of those stores. The Ritzville Drug Co. in Ritzville said in November that it would stop participating in Medicaid.

State Medicaid director Doug Porter told The Seattle Times that Medicaid recipients should be able to easily find another drug store because "we have many more pharmacy providers in our network than we need" for the state's 1 million Medicaid clients.

Those who can't, he said, should contact the state's Medical Assistance Customer Service Center at 1-800-562-3022 for help.

Fred Meyer and Safeway said their pharmacies would continue serving existing Medicaid patients and will take new ones, though both said the reimbursement rate is too low to make a profit, The Times reported.

Private insurers and Medicaid don't pay pharmacies the actual cost of drugs; instead, payments are based on what's called the drug's estimated average wholesale price.

Washington was reimbursing pharmacies 86 percent of the average wholesale price until July, when it began paying just 84 percent. DSHS estimated that could save the state about $10 million.

A company that calculates the average wholesale price was accused in a Massachusetts lawsuit of fraudulently inflating its figures. In a September settlement, the company did not acknowledge wrongdoing but agreed to reduce its figures by about 4 percent.

Walgreens said many private insurance providers have adjusted their reimbursement rates to lessen the effect of the settlement, but Washington's Medicaid program has not.

Jeff Rochon, CEO of the Washington State Pharmacy Association, said pharmacies that continue to fill Medicaid prescriptions at the current rate are "at risk of putting themselves out of business altogether."

-- The Associated Press