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NACDS PHARMACY CONFERENCE

SAN DIEGO -- A Supervalu executive advises retail pharmacies to take her company's lead and consider offering 90-day prescription refill programs to combat mail-order plans and meet customer demand."Major employer groups are migrating over to 90-day plans and retail pharmacies are losing business," Denise Schultz, director of pharmacy support for Supervalu Pharmacies, said during "The Future of Pharmacy

SAN DIEGO -- A Supervalu executive advises retail pharmacies to take her company's lead and consider offering 90-day prescription refill programs to combat mail-order plans and meet customer demand.

"Major employer groups are migrating over to 90-day plans and retail pharmacies are losing business," Denise Schultz, director of pharmacy support for Supervalu Pharmacies, said during "The Future of Pharmacy Benefit Design: Extended Days Supply at Retail," a session at the National Association of Chain Drug Stores Pharmacy and Technology Conference here late last month.

Employer groups have a need to reduce health care costs, and if they can't get lower costs with retail pharmacy prescription fulfillment, they will go to mandatory mail-order plans, Schultz said. Mail-order facilities, which generally offer 90-day prescription fulfillment for the price of a single 30-day co-pay, currently hold about 13% of the market share, she said.

That number is likely to go up with the introduction of the Medicare Part D drug benefit, which goes live Jan. 1, and will offer prescription coverage to individuals enrolled in Medicare.

"Public officials and private benefits managers see mail as a panacea to slow the growth of pharmacy expenses," said Debbie Garza, director of government and community relations, Walgreens, Deerfield, Ill., at the conference.

However, Medicare drug plans must allow enrollees to receive the same benefits -- such as a 90-day supply of covered drugs -- at network retail pharmacies if they are offered at mail-order pharmacies, said John Coster, vice president, policy and programs, NACDS, at the conference.

Plan sponsors are also required to give pharmacies the chance to accept the lower mail-order reimbursement rate, but pharmacies may choose to offer a higher rate. "We think any pharmacy that may want to offer the same pricing as mail order should do so, but if they want to charge more it may be because customers hold value in going to the pharmacy," Coster said.

While Medicare Part D is creating more urgency for retail pharmacies to compete with mail-order facilities, it is creating opportunities as well, Schultz said. Retail pharmacies meet the customers' need for face-to-face interaction and can bring mail-order customers back into the pharmacy every 90 days. "We get customers coming in and asking us about prescriptions they had filled through the mail or asking us if they can get a five-day supply since their mail-order delivery is late," she said.

"We do have to compete with mail order but believe that patients have a choice and will choose face-to-face interaction with a pharmacist over mail order," Garza said.

States are mandating that employers have 90-day plans available for their employees and retailers should take part in these plans, Schultz said. "Several plan benefit managers now offer extended day supply fulfillment options in their plan agreements and retailers can see gains from this business model if they hope to strike a balance between having lower reimbursement rates and more business," Schultz said.

Supervalu Pharmacies, which has had a 90-day refill at a mail-order reimbursement rate available since January 2005, found that involving pharmacists was the most important step in the process. The chain had pharmacies whose customers had not experienced a push to mandatory mail order and hadn't lost business. "Those pharmacists thought we were caving to plan benefit managers with the need for low reimbursement rates," Schultz said.

Supervalu, Eden Prairie, Minn., also had pharmacies that lost 20% of their business to mail order and "couldn't wait to get into a program where they had no option but to take a lower reimbursement rate," Schultz continued. The business impact in the stores seeing losses was so huge that the choice became one of getting no business or getting business at a lower reimbursement rate, she said.

With a 90-day refill plan, the prescription-per-day count will go down but more pills go into each bottle, so retailers may also need to change the way inventory is run. "We want to keep our relationship with customers, not just sit behind the counter filling pill bottles on-site," Schultz said.

TAGS: Supervalu