PHARMACISTS ADDRESS PROBLEMS WITH PBMS

PETER MALBIN

SAN DIEGO -- Managed care organizations must provide adequate reimbursement to pharmacies, said Ronald L. Ziegler, president and chief executive officer of the National Association of Chain Drug Stores at the group's annual Pharmacy Conference here last month.

In discussing managed care trends at the opening-day business program, Ziegler criticized pharmaceutical manufacturers who have bought patient-benefit-manager broker services. "Any objective look at these structures shows they go against the natural course of true market competition and freedom," he said. "Because of this, others in pharmacy are going to continue to call their hand, and the consumer is going to get fed up. Because these types of integrated structures will surely lead to the stifling of competition and choice and to higher prices."

Ziegler said the Federal Trade Commission must take another look at PBMs. "We believe it is clear that some changes are going to have to take place."

The often acrimonious marriage between pharmacies and PBMs was also a much-discussed topic among supermarket pharmacists attending the Alexandria, Va.-based group's conference, Aug. 25 to 28.

"They need us, we need them, but the relationship has to be altered," commented Marvin Moen, director of pharmacy operations at Coborn's, St. Cloud, Minn.

Some supermarket pharmacies complain they are unable to join PBMs. "They [PBMs] decide where their customer base is and they decide which pharmacies to have in their base," said Glen Sievert, pharmacy coordinator for Spartan Stores, Grand Rapids, Mich.

"In Michigan, some of our pharmacies are locked out of the third-party contract. If you are locked out you have to turn away business."

"Grocery is the fastest-growing sector of the retail drug segment, yet a lot of the supermarket pharmacies are not on PBMs and health maintenance organizations," observed John Fegan, vice president of pharmacy at Stop & Shop, Quincy, Mass.

"We have to let PBMs and HMOs know about the services we provide," Fegan said. "We have to educate third-party plans that we can do as much as the drug stores. It takes a lot of cultivation."

Industry representatives say inadequate reimbursement by PBMs is a thorny issue for pharmacies. "We are signing contracts to do business where there is no profit," Moen said.

When asked about that, Andrew Johnson, of Paid Prescriptions, a PBM, said, "We reimburse pharmacies. The employer is driving the cost down. They [HMOs, state governments] are cutting reimbursements."

Retailers see PBMs as another layer of overhead that is taking away their profitability, said Daniel Ramirez, vice president of the pharmacy division at Wakefern Food Corp./ShopRite, Jamesburg, N.J. "They are not viewed warmly. Over a period of time, technology will overwhelm PBMs."