Compared with mail order pharmacies, community pharmacies provide 90-day prescriptions Medicare Part D beneficiaries at lower cost and substitute less-expensive generic drugs more often, a study sponsored by the National Community Pharmacists Association found.


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Study: Community Rx saves Medicare on 90-day scripts

February 26th, 2013

ALEXANDRIA, Va. – Compared with mail order pharmacies, community pharmacies provide 90-day prescriptions Medicare Part D beneficiaries at lower cost and substitute less-expensive generic drugs more often, a study sponsored by the National Community Pharmacists Association found.

NCPA said Tuesday that it funded research by Norman Carroll, a professor at Virginia Commonwealth University, to review millions of Medicare Part D prescription drug event (PDE) data for 2010 from the Centers for Medicare & Medicaid Services (CMS).

The analysis revealed that for 90-day prescriptions filled by local pharmacies, the costs per unit of medication versus mail order pharmacies were lower in terms of total cost (94 cents vs. 96 cents), Medicare costs (59 cents vs. 63 cents) and all third-party payer costs (64 cents vs. 72 cents).

NCPA noted that because of co-pay differentials set by health plans to spur mail order use, patient costs at retail were higher (31 cents vs. 24 cents at mail order) even though the total cost of those prescriptions was less at retail.

The study also showed that substitution of generics for pricier brand-name drugs in 90-day prescriptions occurred more often in community pharmacies: 91.4% of the time vs. 88.8% at mail order. 

"Local community pharmacists not only offer expert medication counseling face to face, but they also provide affordable access to prescription drugs and are leading the way in the appropriate use of lower-cost generic drugs," NCPA chief executive officer B. Douglas Hoey said in a statement. "This study blows a huge hole in the PBMs' arguments that more mail order is the right prescription for Medicare Part D savings."

He added that the findings bring up several points that policymakers and health plan sponsors should consider.

"First, allow local pharmacies to fill 90-day prescriptions. Currently, Medicare Part D drug plans are only required to have some retail pharmacies in their networks provide 90-day supplies. Instead of expanding 90-day mail order, as the PBMs would advocate, this study suggests the opposite — that providing 90-day supply at retail is the right policy to save Medicare money," Hoey explained. "Those plans that rely solely on mail order for 90-day supplies may very well be overpaying for prescription drugs both in terms of total costs and foregone generic drug savings."

He also discouraged the adoption of co-pay levels designed to incentivize the use of mail order pharmacies. "Promoting the use of mail order pharmacies did not save either Medicare or third-party payers one penny, according to this study. Instead, plans should implement neutral co-pay designs that foster competition among all pharmacies based on service, to the benefit of patients," he stated.

Patient choice and access to local pharmacies is critical as well, Hoey noted. "They offer additional health services like immunizations and make vital contributions to local jobs and tax revenue."

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