RETAIL PHARMACY staggered to its feet this year with the implementation of the Medicare Part D prescription drug program in January. An overloaded eligibility computer system and overworked insurance carriers led to early glitches and left many supermarket pharmacies giving out free supplies of medicine to beneficiaries with little or no coverage.
This was exasperated by the passage of the Budget Reconciliation Bill, also in January, which cut $3.6 billion from Medicaid reimbursement to pharmacies through lower reimbursement rates for the sale of generic drugs.
“It's not immoral to make sure that prescription drug pharmacists don't overcharge the system,” President Bush said about the Medicaid cuts in the release of his proposed 2007 budget in February, adding insult to injury.
A push was made throughout the industry to gain clearer communication with the government and the public on how the pharmacy industry operates. “Pharmacists only make about a 2% net profit on all prescriptions, and we want to do more to serve Medicaid beneficiaries, but we need to make fair compensation,“ said Mary Ann Wagner, senior vice president pharmacy, policy and regulatory affairs, National Association of Chain Drug Stores, Alexandria, Va.
Despite the bill, generic drugs became the champion of retail behemoth Wal-Mart Stores, Bentonville, Ark., when it introduced its $4 drug program, making about 300 generic prescription drugs available for $4 in Tampa Bay, Fla., on Sept. 22. By Nov. 27, the program was available in all of the company's 3,810 U.S. pharmacies.
Since then, Target Corp., Minneapolis, has matched the program in all of its pharmacies, while the major drug store chains have not altered their plans, and Cincinnati-based Kroger Co. has matched the program in certain markets.
Other supermarkets widely met the plan's value, but each with their own spin. For example, Meijer, Grand Rapids, Mich., is offering seven oral antibiotics free of charge in all of its stores. H.E. Butt Grocery Co., San Antonio, implemented a free pharmacy rewards card that offers 500 prescription generics for $5, plus savings on all other drugs. And Giant Eagle, Pittsburgh, began its own $4 plan in all of its Pennsylvania pharmacies and is matching Meijer's program in competing Ohio stores, while offering four additional generic prescription cough-and-cold medicines free of charge in those stores.
“To be successful, competing retailers must package the program in such a way that the perceived value will be equal to or greater than the Wal-Mart program,” said Curtis Maki, vice president of program management and HBC/GM/Rx, Topco Associates, Skokie, Ill.
While some retailers worried that discounting drugs could make pharmacy appear as a commodity rather than a part of the overall health care industry, retail health care clinics entered the equation at an increasing rate.
Supermarkets such as the Fred Meyer division of Kroger; Supervalu, Eden Prairie, Minn.; Minyard Food Stores, Coppell, Texas; Publix Super Markets, Lakeland, Fla.; and Schnuck Markets, St. Louis, partnered with clinic providers to open in-store clinics.
Meanwhile, CVS Corp., Woonsocket, R.I., acquired provider MinuteClinic, Minneapolis, with plans to roll out the concept to 1,500 stores nationwide. Target, once affiliated with MinuteClinic, launched its own medical clinics this fall. Wal-Mart and Walgreen Co., Deerfield Ill., also partnered with providers to take part.
“Clinics tend to be co-located around the pharmacy, making it central,” noted Tine Hansen-Turton, chief executive officer of the National Nursing Centers Consortium and executive director of the Convenient Care Association, both in Philadelphia.
Centralizing pharmacy further, sales restrictions on over-the-counter cough-and-cold medicines containing pseudoephedrine went into effect this fall as a result of the passage of the Combat Methamphetamine Act. Consumers now have to go to the pharmacy to buy these products.