Retail Pharmacy Set to Buck Tough Election Year

A conundrum of regulatory issues and decisions in coming months threaten to stifle community retail pharmacy’s goal of advancing patient access to health care services designed to lower overall costs. 

These include anticompetitive practices of third-party pharmacy benefit management (PBM) companies, federal and state cuts to pharmacy reimbursement rates, drug safety issues and access to Medication Therapy Management services.

First off there is the $29 billion Express Scripts-Medico Health Solutions merger decision by the Federal Trade Commission. That deal has been vehemently opposed by retail pharmacy organizations, including the Food Marketing Institute, consumer advocacy groups and others.

If approved — a decision could come down within the first quarter — the merged mega-PBM entity will capture 35% of all prescriptions and will cover six of the 10 largest employers. It would leave just two PBMs — Express Scripts and CVS Caremark — to fight over 80% of the national prescription drug plan market for large employers, noted Cathy Polley, vice president, health and wellness, at Arlington, Va.-based FMI.

“Our members are very concerned about the potential for decreased reimbursement and network exclusions and forcing patients to mail-order providers,” she told SN.

However, some feel the FTC decision at this point is out of their control. “We are probably paying more attention to that than anything else,” said John Norton, a spokesman for the National Community Pharmacists Association, Alexandria, Va. “In many ways while we can generate as much opposition as possible, the ultimate decision will be out of our hands.”

While the industry anxiously awaits the FTC’s decision on the PBM merger, retail pharmacy advocates will continue to press federal and state legislators to change what they see as anticompetitive business practices of PBMs.

“We support legislation and regulations that would level the playing field between PBMs and neighborhood pharmacies such as contracts clearly defined, pricing methodologies and pricing programs. We are in favor of fair and honest network design,” said Carol Kelly, senior vice president of government affairs and public policy for the National Association of Chain Drug Stores, Alexandria, Va.

She noted that PBMs have forced consumers away from retail pharmacy through mail-order mandates. “Mail order is clearly an important option for the beneficiary patient, but patients shouldn’t have to use that as their only means of access for their prescriptions,” she said.

NCPA supports the Pharmacy Competition and Consumer Choice Act, H.R. 1971 and S. 1058.

The bill would increase PBM transparency, provide protections from certain abusive and burdensome audit practices by PBMs, and allow any willing pharmacy to participate in a network, so long as it is eligible to participate in a federal or state health plan.

“PBM practices have produced artificial barriers to competition in the delivery of pharmacy services that increase costs, reduce choice and unfairly compete against small pharmacies. This bill will start to break down some of these artificial barriers,” said Norton.

It would do so by providing a basic level of protection to consumers regarding their choice in where they obtain their prescription medications; saving money by making the inner workings of PBMs more transparent to plan sponsors so they know whether they are getting a good deal; and curbing burdensome audit practices and strengthening fraud protections.

When it comes to maintaining a level playing field for community pharmacies, NCPA also supports the Preserving Our Hometown Independent Pharmacies Act of 2011 (H.R. 1946), which would create a more competitive marketplace for pharmacy services by enhancing the ability of independent community pharmacies to negotiate with PBMs by leveling the playing field for independent pharmacies to provide similar leverage that much larger chain pharmacies have when negotiating their third-party contracts; and by allowing independents to form negotiating entities representing no larger than 25% of all retail pharmacies in a Medicare Part D prescription drug plan region.

Another decision, which has the potential to change the course of health care reform, is the Supreme Court’s ruling on the constitutionality of the Obama administration’s Affordable Care Act. The retail pharmacy community made sure its voice was heard in many of the act’s provisions.

Oral arguments are expected late February or March, with a ruling by June, sources told SN.