By Bruce T. Roberts, RPh, Executive Vice President and CEO of National Community Pharmacists Association
Experience has shown that, when given the chance, community pharmacists can improve outcomes and lower costs. In Asheville, North Carolina, patients battling diabetes and other conditions experienced better outcomes at lower costs after pharmacists were empowered to manage their medication therapy. In Spartanburg, South Carolina, Smith Drug Company enlisted a similar approach to try to get a handle on its soaring health care bills. The cost of caring for diabetes patients was reduced by 50% in one year alone while costs of treating patients under the traditional model continued to rise.
In the face of such evidence, such an overwhelming opportunity to reduce health care costs, you’d think that insurance companies and payers would be running, not walking, in this direction. But pharmacy benefit managers, the companies hired by employers and other health plan sponsors to administrate drug benefits and ostensibly save money, are actually doing the opposite. One can’t help but conclude they’re putting the pursuit of profits – up 20 percent last year alone for the Big 3 (CVS Caremark, Express Scripts and Medco) – ahead of better patient outcomes and lower costs.
They are too consumed squeezing every last prescription drug dollar out of patients, health plans, pharmacies and drug companies to see the big picture. Namely, that the more patients are coerced, even forced against their will, into mail order or large chain pharmacies, primarily CVS, the higher that $290 billion estimate goes. Mandating that patients leave their trusted community pharmacist for a mailbox or a CVS employee rushing to make corporate’s quotas only increases the chances that that patient falls off the medication program.
We already see this playing out in Medicare’s Part D program. PBMs administer this benefit and have been known to set higher co-payments for retail in an effort to shift their business to the PBM’s mail-order pharmacy. Seniors vote with their feet and stay with their community pharmacy – even when the PBM forces them to pay more.
The latest example of these misplaced priorities is an interview Medco CEO David Snow conducted recently with CNNMoney.com, which perpetuates falsehoods.
First, that mail-order offers huge savings over retail pharmacies. There are three problems with this statement. PBMs routinely pay their mail-order facilities more than they would a retail pharmacy for the same prescription. They have been known to switch patients from lower cost generic to expensive, name-brand drugs to pad PBM profits through lucrative manufacturer rebates. In addition, higher overall medical costs are likely due to the increased chances of patient non-adherence as explained earlier.
Second, that independent pharmacies are “losing the majority” of their business to large chains due to “more competitive prices at retail.” Mandatory mail-order programs and other forms of PBM self-dealing are far more detrimental to community pharmacies’ ability to continue serving patients. A 2008 Consumer Reports study advised consumers to shop around for their prescription drugs and even found Walgreen’s and Rite-Aid to be among the most expensive vendors of the drugs studied. Large chains have greater market share and, thus, much more leverage to negotiate more generous reimbursement contracts with PBMs than an independent ever could. In the case of CVS Caremark, where the largest retailer and PBM are one and the same, downward price pressure is even less.
Independent community pharmacists are the most effective weapon to keep patients on their medication to improve health outcomes and to save billions of dollars. Unfortunately, that’s less likely to happen when PBMs come between patients and their pharmacists.
The National Community Pharmacists Association, founded in 1898, represents the nation’s community pharmacists, including the owners of more than 23,000 pharmacies. The nation’s independent pharmacies, independent pharmacy franchises, and independent chains dispense nearly half of the nation's retail prescription medicines. To learn more go to www.ncpanet.org.