After years of taking its lumps from government, retail pharmacy — including supermarkets — is stepping up the fight for its interests
Supermarket pharmacy made great strides in 2007 in letting its voice be heard in Washington and in the states. Now, it plans to ramp up its efforts to fight important battles in 2008.
Among the issues that are top-of-mind for pharmacists are Average Manufacturer Price (AMP), Medicaid reimbursements and behind-the-counter drug requirements.
They are also watching new Flexible Savings Account debit card rules and efforts to move more pharmacy processes to electronic systems, including e-prescriptions (see “E-Train Is Rolling,” next page).
Retail pharmacy organizations and retailers said they will not shy away from talking to state and national legislators this year, as they did in 2007.
More pharmacists will be involved in grassroots activities, including calling their legislators and visiting them in Washington.
“There has been a lot of grassroots activity with FMI, NACDS and NCPA,” said John Beckner, director of pharmacy and health services for Ukrop's Super Markets, Richmond, Va., referring to the three national associations representing retail pharmacy. These are Food Marketing Institute, Arlington, Va., National Association of Chain Drug Stores and National Community Pharmacists Association, both in Alexandria, Va. “More people are getting involved, and more frontline pharmacists are willing to make phone calls,” Beckner said.
NACDS recently took out full-page ads in major national newspapers to educate presidential candidates and the public on issues important to retail pharmacy.
“We have a new marketing and public relations office. We are enhancing the image of pharmacists, which have the most favorable profession in the country [in public polls],” said Steven Anderson, NACDS' president and chief executive officer.
In addition, 2008 will be a year of pharmacy organizations uniting on common causes.
“I see the major pharmacy organizations coming together and uniting on these issues. They really do affect everybody,” Beckner said.
AMP RULES ON HOLD
After fighting the issue throughout 2007, the industry gained a reprieve from implementation of Average Manufacturer Price — better known as AMP — rules in mid-December.
A federal judge granted NACDS and NCPA a temporary injunction from implementing the rules in January. The Centers for Medicare and Medicaid Services had set up a formula for reimbursing pharmacies for Medicaid prescriptions that would have significantly hampered pharmacy reimbursements, and also limited drugs that could be prescribed.
“It is the most serious issue this industry has faced in a long time. It would reimburse pharmacies 30% below their acquisition costs,” Anderson said.
An injunction is warranted because Medicare beneficiaries “may find access to their community retail pharmacies reduced or eliminated should the injunction not be issued,” according to the order from U.S. District Judge Royce C. Lamberth, who did not give a timeline for the injunction.
Despite the temporary injunction, retail pharmacists and associations plan to work on long-term legislation in 2008 that would fix the CMS reimbursement formula and protect retail pharmacies.
The AMP issue is a major challenge for retailers, said John Fegan, senior vice president of pharmacy for Ahold USA, Quincy, Mass. “We will continue to focus on it, because it impacts our profitability of our generic vs. brand prescriptions.”
The major retail pharmacy organizations plan to work with legislators throughout 2008 to pass the Fair Medicaid Drug Payment Act to fix the AMP problem.
“There is a broad coalition of groups that are supporting that legislation. All supply chains agree that this needs to be fixed,” said Paul Kelly, vice president of federal government affairs for NACDS.
“We need a fix because of the devastating effect it could have. The last Congress created this mess, so we hope this Congress cleans up the mess,” said Charlie Sewell, senior vice president of government affairs for the NCPA.
Fegan is optimistic that retailers and legislators can work together toward a favorable outcome in 2008.
“With the continuing focus on the part of all retailers, there is a very good chance [of an agreement]. There is a lot of grassroots activity on it and hopefully in 2008, we will revisit the topic,” Fegan said.
While the Food and Drug Administration has said certain drugs moving to over-the-counter status should be kept behind the pharmacy counter so pharmacists can advise patients, the issue is far from settled.
The FDA has not specified which drugs switching to OTC should be kept behind the counter. Cholesterol-lowering prescription drugs Mevacor and Pravachol, which had been suggested for behind-the-counter status, will not be moving to OTC soon. The FDA recently ruled that the two drugs need to maintain their prescription status.
Deciding which drugs to place behind the counter is the tricky issue, according to pharmacists and other industry observers.
“Many of the drugs that will go OTC should be under the direct control of the pharmacist, so there is a good health and wellness conversation with the patient. However, it really needs to be a partnership between pharmacy professionals and the government, instead of it all falling to us [to decide],” Fegan said.
“As the FDA considers this new class, we urge the agency to limit the scope to medicines that would otherwise be available only by prescription and a pharmacist's intervention can help ensure these drugs are not abused,” said Cathy Polley, vice president of pharmacy services for FMI.
Pharmacists want to know how other requirements of the new class will be implemented. “This ultimately would have a positive effect on retail pharmacy sales, but would the additional profit be eaten up in labor and inventory costs?” said Dan Milovich, director of pharmacy operations for Bashas' in Chandler, Ariz.
Still, most pharmacists plan to support the new class. “I would be in favor of it. It presents another opportunity for the pharmacist to interact with the patient, as opposed to the patient just purchasing the product,” Beckner said.
In 2008, retailers will also work toward implementation of technology required by the government: systems to accept Flexible Savings Account debit cards.
Most grocery chains have the technology in place to accept FSA debit cards this month, or they will sometime in 2008. While food retailers are required to implement the FSA systems earlier than drug chains and mass merchandisers, the industry has stepped up to the challenge.
The IRS guidance stated that all retailers using a Visa or MasterCard merchant category code that is not health care related has to implement an information-inventory approval system to accept FSA debit cards.
“Most food store pharmacies will be ready sometime in January. We are feeling pretty comfortable right now,” Fegan said.
Pharmacists plan to stay on top of numerous other state and national issues this year:
Health care reform: “Comprehensive health care reform is a hot issue in the presidential campaign and will continue to attract a good deal of media attention as the election season progresses,” Polley said. While legislators and candidates are currently focusing on health insurance, pharmacy issues will likely receive more attention in 2008.
Drug pedigree laws, state legislation requiring a paper trail on drugs that could be counterfeited: This will always be a top issue for pharmacies, so they continue to work “very closely with manufacturers and others to ensure supply chain security,” Anderson said.
Prompt pay: The U.S. House and Senate are considering bills that would require prescription drug plans and Medicare Advantage Plans to pay all claims submitted electronically by pharmacies within 14 days, or 30 days for prescriptions submitted by other means.
If the legislation is passed, it would harm smaller pharmacy operations and independents. “About 75% of our Medicare Part D business is taking over 30 days,” said Charlie Sewell, senior vice president of government affairs for NCPA.
Prescription pad rules: While FMI and other associations garnered a delay in the tamper-resistant prescription pad requirement, preliminary implementation is still scheduled for April 2008. The pharmacy associations will work to ensure that the rules are implemented as smoothly as possible.