DISCOUNT ACCESS CALLED VITAL TO RETAIL PHARMACY'S FUTURE

MICHAEL SLEZAK

ORLANDO, Fla. -- Community retail pharmacy must gain equal access to pharmaceutical manufacturer discounts and maintain some control over the delivery of pharmaceuticals to compete in today's changing and competitive environment.

That was the message presented by the leaders of the National Association of Chain Drug Stores at its annual Pharmacy Conference, held here Aug. 21 to 24 at Marriott's Orlando World Center. Delivering the message were NACDS Chairman Jack Futterman, who is also chairman and chief executive officer of Pathmark Stores, Woodbridge, N.J., and Ronald Ziegler, president and chief executive officer of NACDS.

Ziegler described two different futures for community pharmacy.

"One vision includes a strong, viable, competitive community drug store infrastructure," Ziegler said. "Another sees a limited system of heavily controlled drug store networks fitting into a market of vertically integrated pharmaceutical and pharmacy benefit management 'megafirms.' "

More than 1,400 people attended the conference, representing a record 92 chains with a combined 20,000 pharmacies.

"Community pharmacy must maintain a direct channel of access to outpatient prescriptions," said Ziegler. "This can only come about with equal access to discounts so all purchasers will compete on equal footing."

Manufacturers should be allowed to set pricing terms based on volume, market movement performance, formularies for networks or other reasonable standards, said Ziegler, but all classes of trade "should have access to those discounts on equal terms.

"A market dominated by a few 'megafirms' controlling broad product formularies, distribution and pricing at every step is not good for the country, for the citizens, for the profession of pharmacy or community retail pharmacy as a whole," Ziegler stated. "This is why we are fighting for equal access to maintain and enhance competition and to maintain an open competitive channel to the prescription marketplace for community retail pharmacy," said Ziegler.

Ziegler and Futterman lauded the formation of Pharmacy Direct Network, an independent pharmacy benefit management company launched by NACDS in March and open to all retail pharmacies, including those in supermarkets.

Ziegler said PDN has been established to enhance competition, and would not be controlled by NACDS. "PDN will remain independent no matter what those who wish it limited success may claim," he said. "PDN will be a viable benefit management player," that will be different from other pharmacy benefit management companies because it will not lock out pharmacies and will not be tied to one single economic source, Ziegler said.

Futterman referred to PDN as "a dream I thought couldn't happen," because, despite its obvious benefits, he felt potential members would be too divided on issues to unite in one entity. Retail pharmacists "may be genteel, but we are tremendous and fierce competitors in the marketplace," he explained.

PDN will help community retail pharmacies "manage costs and improve care, not squeeze them out of existence," said Futterman.

Futterman also attacked "discriminatory pricing" practices of pharmaceutical manufacturers who offer lower prices on their products to HMOs and hospital and mail-order pharmacies than they do to retail pharmacies.

Futterman recalled his first days working in a pharmacy at his uncle's store in Columbus, Ohio, in 1948, a time when he said manufacturers "used to be treated with great respect." In recent years, he said, the relationship has "faltered."

Futterman said he hopes changes in the health care system will level the playing field on pharmaceutical prices. "With the elimination of discriminatory pricing," he said, "community retail pharmacists can provide superior care at cost-effective prices.

"The community retail pharmacist standing at the pharmacy counter is often the only health care professional seen regularly [by patients]," Futterman stressed. "That's what pharmacy is all about. Face to face, eye to eye, personal interaction and consultation."

Ziegler said he hoped a pharmacy benefit would be included in any health care reform bill that might be passed by Congress.

"Prescription drug therapy," stressed Ziegler, "is on the cutting edge of health care in America and should be a major component of reform, not an afterthought and not an add-on."