NEW BLUE CROSS POLICY MAY HURT PHARMACY SALES

CAROL ANGRISANI

A new Blue Cross and Blue Shield prescription policy may cause supermarket pharmacies to lose customers who are federal retirees.

As of Jan. 1, federal retirees enrolled in Blue Cross/Blue Shield's Service Benefit Plan, Standard Option/Medicare Part B, are required to pay 20% of the preferred provider allowance for drugs purchased at in-network retail pharmacies. They also have to pay 40%, up from 20%, of the retail cost for prescriptions bought at nonpreferred pharmacies. Most supermarkets fall in the preferred provider category, according to Blue Cross/Blue Shield, Washington.

The main concern about the program is that the copay is waived for prescriptions purchased through mail order. The option covers what are known as maintenance drugs, or medications that typically come with more than a 21-day supply. Short-term drugs must still be filled at retail pharmacies.

The National Association of Chain Drug Stores, Alexandria, Va., estimates that nearly a million federal retirees will be penalized by the change in service.

Supermarket pharmacists said the policy shift will mean that, to avoid the copay, many federal retirees will have their maintenance prescriptions filled by mail order rather than their local pharmacy.

The effect on supermarkets largely will depend on where they're located. For example, states that have a dense population

of federal retirees include New York, Florida, Ohio, California, Illinois and Pennsylvania.

Several pharmacists interviewed said their chains serve only a small number of federal retirees, so sales wouldn't be drastically affected. But most still oppose the policy change, saying it will hurt not only the pharmacy, but also the entire supermarket.

"Retirees like dropping their prescription off, doing their grocery shopping, and then picking up their prescriptions on the same trip," said Karen Silverblatt, pharmacy director at Giant Eagle, Pittsburgh. "Now that's being taken away from them."

Giant Eagle has a large percentage of federal retiree patients, though Silverblatt could not estimate how large. She said the retirees already voiced their concerns about the new plan.

"They're upset they have to go through mail for maintenance drugs," she said.

Silverblatt predicts most members will shift to mail order because they won't be able to afford the added out-of-pocket expense. On the average, a 20% copay could translate into $12 per 60-day prescription -- and retirees usually have multiple maintenance prescriptions, she said.

"To a retiree, 20% is a lot of money," she said.

About 20% of Fred Meyer's pharmacy customers are retirees, with an even smaller amount federal retirees, said Dave Schulberg, director of pharmacy at the Portland, Ore.-based chain. As a result, the chain wouldn't lose substantial sales dollars if its federal retiree patients opted for mail order. But Schulberg said the policy shift has wider implications.

"It's not proper medicine," he said. "All along we've been told to provide pharmacist care, and that taking proper prescriptions is supposed to matter for something. This is saying all that doesn't matter."

NACDS and the National Association of Retail Druggists, also based in Alexandria, Va., have objected to the new policy. Because retirees take multiple medications, it could cost them an average of at least $500 a year, said Todd Dankmyer, senior vice president of communications at NARD.

NACDS has asked the U.S. Office of Personnel Management, which administers the plan under the Federal Employees Health Benefits program, to postpone instituting the new policy until a study under way by the General Accounting Office on the mail-order program is released in June.

"This is economic coercion for federal retirees," Ronald Ziegler, NACDS president and chief executive officer, said in a press statement. "Federal retirees should continue to have the choice to use their local pharmacy without an economic penalty."

About 70 U.S. representatives signed a letter to the Office of Personnel Management expressing their concerns about how the new policy will affect retirees' access to pharmacy services and patient counseling at local drug stores. The letter estimated that it could mean a $600 million loss for local pharmacy business.

But the OPM said there are no plans to delay the policy. In a Dec. 21, 1995, letter to the lawmakers who voiced concern about the plan, OPM Director James King wrote that the policy is sound. He said mail-order prescriptions are just as safe as those purchased at retail pharmacies.

"Mail-order pharmacies are subject to the same degree of regulation and scrutiny as retail pharmacies," King wrote.

King added that if a member has questions about a mail-order prescription, a 24-hour, toll-free information hot line is available.

He also wrote that retirees who chose not to go through mail order will face minimal out-of-pocket expenses. According to the letter, in 1994 the average cost to the member for prescriptions obtained at a preferred retail pharmacy was $2 per 30-day supply for generic drugs and $6.30 per 30-day supply for brand-name drugs.

Blue Cross/Blue Shield also has defended the policy shift. "We feel these changes for 1996 are reasonable in light of escalating costs," Stephen Gammarino, vice president of the federal employee program, wrote in an Oct. 6, 1995, letter disseminated in response to inquiries about the new plan. "They are instrumental to achieving our objective of providing innovative and cost-effective pharmacy benefits while keeping premiums at a competitive level in the individual choice [Federal Employees Health Benefits] market."

About 3% of Raley's customers are enrolled in the FEHB plan, said Jody Stewart, pharmacy director. But it will still have an adverse effect on the West Sacramento, Calif.-based chain, she said.

"It's part of the gradual erosion of our business," Stewart said.

Citing the popularity of the FEHB option, Stewart said many federal retirees approached the chain and asked it to participate in the plan. After a lengthy process, Raley's implemented the plan three years ago.

"Our customers were very vocal. They wanted us to be part of it,' she said. "It took us a long time to administer it, and now it's being jeopardized."

Both NACDS and NARD ran ads in the Federal Times, a newspaper for federal employees, encouraging retirees to consider enrolling in other health insurance options. The organizations also provided their members with bag stuffers that contain a variety of patient information material, including fliers encouraging federal retirees to voice their concerns to Congress.