NACDS READIES EFFORT TO TAKE CONTROL FROM 3RD-PARTY BROKERS

JANICE ZOELLER

NEW YORK -- The National Association of Chain Drug Stores and its member chains are about to mount an aggressive effort to take back control of pharmacy from "third-party market brokers," said Ronald Ziegler, president and chief executive officer, at a press conference here.

Ziegler described 1994 as "the pivotal year for community pharmacy." The major change, he said, is that "the customer will be different." He explained that while the patient will continue to be "of professional interest," the payer will be a third-party plan.

NACDS is entering its 60th year "with an optimistic spirit," said Ziegler. Sales of member chain drug stores increased 5% during 1993, he said, with chain drug store sales accounting for 71% of the nearly $84 billion drug store industry.

"We have prepared for this marketplace," said Ziegler. "We are not about to turn over our assets and pharmacy base to market interlopers or brokers.

"There is a tremendous concentration of economic power and influence [among third-party plan administrators and payers] that we think is unhealthy," said Ziegler. "We have to have increased competition.

"Various chains will take action to diffuse that concentration of power," said Ziegler. "Steps are being taken to transfer that power to a broader base, to those who hold the license base, and cut out middlemen."

Ziegler noted that two of the largest plan administrators are "vertically integrated companies." Although Ziegler would not name the companies, he almost certainly meant PCS, Scottsdale, Ariz., division of McKesson, San Francisco, and Medco Containment Services, Montvale, N.J., recently acquired by Merck, Rahway, N.J.

The concentration of power into fewer hands, said Zielger, "has resulted in less opportunity for freedom of choice," for customers to choose their own pharmacy and for pharmacies to participate in an open marketplace.

"We will bring pharmacy into its rightful role of health care delivery with better drug utilization review and more efficient patient compliance," said Ziegler.

"We have a vision and a game plan to make this industry even stronger," said Robert Hannan, chairman of the board of NACDS, and chief executive officer and president of Thrift Drug, Pittsburgh.

A major accomplishment of the past year, said Hannan, has been to form the Community Retail Pharmacy Health Care Reform Coalition with the National Association of Retail Druggists. The coalition has had an effective voice in health care reform, said Hannan.

Ziegler said that NACDS will enlist pharmacists at store level to help sell President Clinton's health care reform proposal to pharmacy customers. "We're gearing up pharmacy to communicate the value of pharmacy care," he said. Resource materials are being developed by NACDS for possible distribution later this month, said a NACDS official.