Acknowledging the significant advancements made by retail pharmacies and pharmacists, National Association of Chain Drug Stores chairman Larry Merlo noted that “the road ahead is still wide open, and the challenges and opportunities it brings are tremendous.”

National Association of Chain Drug Stores, NACDS, NACDS Pharmacy and Technology Conference, Larry Merlo, CVS Caremark, retail pharmacies, pharmacists, health care, Steve Anderson, Bob Egeland, Hy-Vee, John Schultz, medical costs, MTM, medication therapy management, electronic prescribing, pharmacogenomics, pharmacy industry, reimbursement rates, drug store, Flexner Report, Medicare Part D, average manufacturer price, AMP

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‘Road ahead wide open’ for Rx

September 13th, 2010

SAN DIEGO – Acknowledging the significant advancements made by retail pharmacies and pharmacists, National Association of Chain Drug Stores chairman Larry Merlo noted that “the road ahead is still wide open, and the challenges and opportunities it brings are tremendous.”

Speaking at the NACDS Pharmacy and Technology Conference, Merlo, who is also president and chief operating officer of CVS Caremark Corp., offered his perspective on the state of pharmacy and its ability to develop solutions that can lead to improved health care.

Also giving their viewpoints were Steve Anderson, president and chief executive officer of NACDS, and Bob Egeland, vice president of pharmacy for Hy-Vee Inc. and chairman of this year’s Pharmacy and Technology Conference.

In his remarks, Merlo outlined several solutions that pharmacy can provide to improve health care and reduce medical costs. Those measures include capitalizing on the relationships that pharmacists have forged with patients by providing counseling, immunizations and medication therapy management (MTM); leveraging electronic prescribing; taking advantage of pharmacogenomics and other technologies that link genetic testing to the effectiveness of drugs; and engaging in collaborative practice agreements that increase health care quality and access and cut costs.

“We’re positioned to help control the costs of health care by advocating for the value of pharmacy care — the cost-effective treatment of disease, particularly chronic disease, through better mechanisms to promote adherence and effectiveness,” Merlo said. “Service will be defined by how influential our pharmacies have become in shifting patient behavior in ways that improve the health outcomes of patients and lower the cost of health care for society.”

Merlo asserted that health care reform has brought the pharmacy industry and profession several benefits.

“I think it’s a good thing for the country and for our industry. On the plus side, expanded coverage will drive utilization for 32 million Americans currently uninsured, a change that will improve health outcomes,” he said. “We should keep in mind that this is on top of the baby boomers hitting senior citizen status and the fact that the over-65 population is expected to grow 65% by 2025 ­­— further increasing the need for and use of prescription medications.”

Still, Merlo cautioned, changes in health care will bring along a growing role for government as a payer and, with that expansion, additional pressure on pharmacy margins and reimbursement rates.

“If you look at the basic fundamentals of reform — quality, cost and access ­— it is clear that we have only tackled one of the three reform pillars [access]. An important takeaway is that pharmacy has the opportunity to be a key contributor to lowering health care costs over the long term,” he said. “If we agree that expansion of access makes sense, we need to begin the work on the cost and quality side of the equation.”

One of those costs, Merlo noted, is in the area of controlling chronic diseases, a challenge that he said already costs the country over $1 trillion and that will soar to about four times that amount over the next 20 years.

“We need to be bullish on the fact that pharmacy is the key to controlling costs,” Merlo pointed out. “Nonadherence for our chronic disease population alone is expected to cost the health care system $290 billion in avoidable and costly health complications.”

The changing image of pharmacy described by Merlo was reflected in what Anderson claimed is a time of renaissance in pharmacy.

“This renaissance refers to advancements of NACDS members in patient care; it also refers to recognition of this work by policy makers, opinion leaders, the media and other health care providers,” he said.

NACDS is committed to improving pharmacy’s place on the map, Anderson stressed.
“This is about the transformation of NACDS — the creation of new and results-focused departments in communications and government affairs, telling the story of pharmacy as the face of neighborhood health care,” he explained.

Anderson’s speech was peppered with references to the profession’s advancement since the 1910 issuance of the so-called Flexner Report, a 346-page medical publication that downplayed the role of pharmacy and that made eight “vague” references to the industry.

By contrast, he noted, this year’s 906-page health care reform law provides ninefold more references to pharmacy and 19 references to pharmacists, as well as 10 references to MTM.

Because of NACDS’ influence with congressional leaders, Anderson commented, the new health care law incorporates grants and pilot programs that include MTM, and it improves the Medicare Part D MTM benefit as well.

“We have studies in which every $1 spent on MTM reduced overall health spending by $12,” said Anderson. “Congress wanted to put this into action.”

Similarly, NACDS has worked to provide a remedy to “the crushing pharmacy cuts” under the Medicaid average manufacturer price (AMP) model.

“The new law includes a much-improved definition and calculation method for AMP,” Anderson said, adding that it provides a better estimate of pharmacies’ costs for purchasing generic drugs.

The achievements of the trade association also drew attention from Egeland. “NACDS is tackling some huge issues. It is helping to promote the importance of medication adherence, which matters to chains and suppliers alike,” he said. “It is redefining pharmacy in the minds of government officials.”